Since I only do SP, I'll chime in as well. I always call all illegal pitches as soon as I recognize they're illegal, regardless of the level of competition. I might give higher-level leagues a slightly higher ceiling (maybe 13' or so) for the pitch, but nothing ridiculous. The point of concern, as always, is whether you're as consistent as you can be when making those calls.
There's nothing in the book that says, "you don't follow the book." The book is written to be followed, and it's up to individual leagues and tournament directors to determine what rules, if any, they want to modify. The umpire is not empowered to make that determination in a relatively well-run environment, and that includes local leagues (even if they're not well-run).
I agree with Mike that it's important for the batter to know when you have determined a pitch to be illegal. Those flat pitches are tough to call quickly, but we do the best we can.
To answer question 2, I'd say the only thing you can say to him is, "well, I hear ya, but this is how ASA wants us to call it."
Calling illegal pitches is not overly-officiating. It's what we do.