The coach may take the penalty or the result of the play when an IP is called therefore, at the end of playing action I ask coach which option he wants.
My answers to OP questions:
1) Yes
2) Yes
3) No
I checked LL Softball Rule 8.01 (PENALTY) an 8.05 (PENALTY). The way I read these sections supports my answers listed above (IMO).
I also have had the honor of umpiring various levels of LL softball tournament games ranging from 9-10 All-Star Tournaments through Big League Softball Central Regional Tournament. I would love being assigned to a LL Softball World Series Tournament (or 2).
Sam