1. Known .. the HEVC decoder isn't in as good shape as H264/VP9 ones (no VP9 on S905 tho). It's not likely to change anytime soon due to the lack of developers interested in working on the Amlogic VDEC. All historic work has been done by commercial developers who'd be happy to continue working on it - if someone pays them to do it. There might be some changes to that, but early days.
2. I've not seen random reboots with a WP2 (which should behave the same) .. hard to comment without more specific info.
3. No, we are using extline and mainline u-boot not the prehistoric vendor u-boot, so no boot.ini.
4. OS contains "ledfix.service" which deliberately sets all LEDs with a heartbeat config to 'none' as flashing LEDs are annoying on an HTPC device. You can disable/mask the service to stop that and see the system heartbeat again. To change from a system heartbeat you need to change the device-tree to use a different trigger.