Batter runner ?
 

Situation:
Batter bunts to first baseman. Runner on 1st advances to second. Batter-runner stops to force firstbaseman to come and tag him out.

My ?'s:
Is there a point where the runner is called out for not advancing to firstbase? Or must he be retired by tag or throw to firstbase?

You do have to actually get the runners out to call them out. Assuming he did only what you said above, play is still live.

In Baseball, the runner can stand there, or retreat up until s/he touches or passes the plate. Then s/he's called out.

In softball (I've been led to believe) the runner is out when s/he begins to retreat.

Correct if you mean Batter/Runner.

And in softball it's an immediate dead ball so the runners have to return to last base (8-2-8) ....ouch.

Why go after the B/R ? Just tag first.

Pitcher stayed on mound, no one coverd first.

Runner at second started to third placing first baseman in a bind.
Throw to 2nd/3rd batter/runner is safe at first.
Finally, pitcher coverd first to get out.

Normal situation. Don't over-think it. F3 just hasn't learned how to play it out yet.

It's exactly why coaches yell "don't run into a tag" on these and similar situations.