Thanks for the reply! You're right, #1 is more of an SEF issue. I'll look into other options for that.
As for my ideas for #2, I was thinking the affiliate would have a sort of "bank" where their money would sit. They could either use it to buy stuff on the site, or cash it out monthly. It would have a ledger of transactions, like:
Affiliate reward for John Doe ....... $10
Affiliate reward for Jane Doe ....... $15
Purchase of Product #1 .............. ($5)
Total ............................... $20
I dunno, just a thought. Thanks for your consideration!