Howard Miller

Yes - find another hosting provider.

Open_basedir means that you can only place 'moodledata' in directories that your host specifies in php.ini. You need to know the open_basedir setting to determine that. These directories are often web-served and Moodle doesn't run like that. The sort of host that enforces open_basedir just isn't going to be suitable for Moodle. 

Next, you're going to find that they've restricted access to certain PHP functions that Moodle needs (and so on)

What theme is this? If not Boost, switch to Boost and see if it changes.

However, where is that huge amount of footer text defined? The obvious answer is that there's a mistake in there somewhere. Unclosed divs and that kind of thing.

IANAL

Surely the whole point of open source software is that users can do whatever they like with it.

That includes selling it if they can find someone to buy it. You really can't say "It's open source, except for...."; that entirely misses the point. I've never seen the license for Workplace but, apparently, it's not open source - or not all open source, anyway.

Yes - the editing teacher capabilities should override the non editing teacher ones.