Some knee-jerk responses:
1. Backatcha! You got this straight. I am still astonished at how cheating is basically ignored by the powers-that-be, equivalent to a tacit endorsement of awful behavior. It takes a heckuva mature 13-year old to understand that any penalty for pervasive cheating will come years later, if at all.
2. Well, sxit happens. My kid got some players out of her league, for sure; then, the goal becomes to play the best match possible, and afterwards, to learn as much as you can from the experience of playing someone far better. (And, then, in the backdraw, finding kids to send home.) Someone's gotta play the top seed, and it's not going to be one of the other seeds. The draw and seed system works out fairly enough over time. (Agree with you on TRN's H2H v. USTA's PPR, though.)
3. Kids really have to play for the fun and experience of competing, not for the reward of a scholarship. I am happy my kid got a full at a great school and I am not volunteering to give it back, but I am not really convinced that kids who "work hard" at a sport deserve compensation for it.
A good post. #1 and #3 should be truncated, laminated, and distributed to all parents and players signing up for their first six USTA events.