Hello!
But then again exactly how am I as a Mech Eng degree qualified ATPL/FI qualified to say who would or wouldn't get a medical/license?
It used to be different in my country before JAR, but now the medical is only required before a student can be released for solo flights. Until then, an FI does not need to worry about the chances his student has for getting his medical. Unless he has moral concerns about taking someones money for a trial lesson who has (or seems to have) few chances of ever getting a license. In our school, we strongly advise would-be students to get their medical _before_ spending any further money on flight training. But the choice is theirs of course.
And regarding the original questions:
1: Yes, always. Especially in the early stages of training: The first impressions one gets are the ones that last longest. Our school trains mainly (95%) ATPL candidates and they will have to use checklists throughout their career. It's simply part of the job. Right from the beginning.
2: Yes, at least as far as seat belts and doors/exits are concerned. Without proper training, a (smallish) fire extinguisher and a first aid kit are of little value anyway.
3: Not at our home base (international airport), but why not at a small airfield? RT standards are so poor there (sometimes) that a student on a trial lesson under supervision of his instructor will probably stand out
