FYI, decision has been made on the first question. Luckily, my dad had uninsured/underinsured motorist coverage with a $100,000/$300,000 limit. $100,000 for damages, $300,000 for medical bills. So, between his and their insurance, it should cover most bills. Then, if anything else needs to be paid for, the kid will have to pay, but just for actual costs. Perhaps a bit of pain and suffering, but nothing unreasonable. In fact, if I know my father (for years a private practice defense attorney, and now a healthcare corporate attorney), he'll go after far less than "reasonable".
For the second question, I like the idea of one penalty for detracted driving, with a list of things that qualify. I like that a lot. Include things like talking on the phone, intoxicated, eating, putting on makeup, reading, fiddling with car computer, changing clothes, etc.