3.) One of my players is concerned that Defense is ridiculously better than DR, and aside from what I've given, (let's assume for this question that I've given nothing, so I can get a full range of answers) what are the advantages of DR over Defense?
Not sure where this sentiment is coming from. On the surface, not getting hit may seem better than reducing damage when you get hit, but not taking any damage when you do get hit can be awesome, too.
Someone with Moderate Chainmail w/ Heavy Fittings will get a DR 5, effectively 8 vs edged weapons (Edge Resistance 3). Even the d12 Long Sword will only break that threshold 1/3 of the time, barring a high strength score, which is not nearly as ubiquitous an occurrence as it is in D&D.
resource that this uses up is 325s. It requires no specific attributes, no feat expenditures nor any specific class to use. Even the Mage could make use of this simple build. Also, someone who wants to bypass the armor, would have to take a -9 penalty AND have the Called Shot trick.
For this benefit, you are giving up 2 points of defense, 1 point of armor check penalty and move 10ft slower. If those numbers really bug you, take Armor Basics and drop to light fittings. The defense penalty, armor check penalty and speed penalty all disappear and you are left with 1 less DR.
Conversely, a high defense build requires a large expenditure of limited resources, specifically, high Dex and levels in small subset of classes that have a good defense bonus. That isn't to say that defense builds suck vs DR, but I wouldn't say that one is so much better than the other.
The one big flaw with a defense heavy builds that eschews DR that I see comes when your opponent rolls that 20 and activates his critical. When, not if, that time comes a high defense is going to do you a bit of good. If you have that high DR, odds are you aren't going to be taking any wounds, and even if you do, they will be slight, but the character who is all defense is going to be hurting bad, if not outright unconscious, and hoping another critical hit doesn't come his way.