Question #2: The character's "resting form" (Mentioned in Question #1.) uses the Physical Immunity Power (YS pg 186) at a whopping -8 Refresh, however, this is mitigated by attaching The Catch (YS pg 185). The Catch is Cold Iron as he is a Changeling with Fetch heritage. Since he is protected from everything except something specific he gets a +0. Then, since The Catch is something anyone could reasonably access (cold iron) he gets a +2. And finally, since pretty much anyone with knowledge of the supernatural would know a child of fae is weak to cold iron he gets another +2. This means he is able to take the Physical Immunity of -8 Refresh at the cost of -4 Refresh. His Modular Abilities has just enough to cover this. He sometimes switches to something like Inhuman Strength (YS pg 183) and Supernatural Toughness (YS pg 186) for a total of -6 Refresh. When doing something like this we've been playing it where The Catch only gives him a +3 Refresh discount (Since Catches cannot reduce the total cost of your Toughness Powers below -1 Refresh.). And if he was to take something like Inhuman Speed and Inhuman Strength he'd get no Catch discount at all as he has no Toughness Powers taken at that time. All of this seems to be how it should be played, but I wanted to make doubly sure.
So what is this resting form of his that has Physical Immunity?
Are you just letting him declare he's shifting into "Form of look like what I normally do except I'm immune to harm", "Form of Looking like I normally do, except strong and fast", etc?
If you treat these Powers as purely mechanics based, you'll run into big problems. Hero and GURPS can handle that, but that's not really what Dresden Files is designed for.
Make him start by picking what form he is going into, and then tell him where his Modular Abilities go. You don't have to be draconian about it, and for True Shapeshifting you can probably let him make up forms that don't exist in nature/supernature ("I want to change into a troll-like creature but also covered in spikes!"), but the powers taken and skill shuffle that happens should be dictate by the form. The powers should probably also relate pretty strongly to the physical form taken (so you shouldn't be picking up powers like Seelie Magic or Domination or whatever just because you're shifting into a shape that has them, because those powers don't really come from the shape).
So he can say "I want to shift into being a troll", and then you can tell him either a) what Powers he gets as a Troll and what skill shuffles he should do, or b) that he doesn't have enough refresh in modular abilities to be a troll.
Anyway, like I said, you don't have to be draconian about it and he can certainly suggest what powers and skills a given form should have. But start with the narrative - what form is he assuming? - and have the mechanics flow from that.
I bet you that solves 9/10ths of your problems right there, if only because shapes that have high level of physical powers tend to be pretty bloody obvious.