I'm totally with you in that the overlay feature has a lot of room for improvement. But it is what it is and we'll have to live with that... Despite all its limitations, I think its still quite a nice feature to have.
Regarding the toolbar buttons for your receiver: Couldn't you just add a toolbar and buttons to your system page and pop up a panel with the respective controls on each activity? Similar to the dialog thingy I did a few weeks ago... Of course, if PEP already had support for such a thing, that would be awesome....
Personally, I use the hard buttons for that. I have assigned my receiver's surround mode setting to the first button through the system page, because that's the one I need most. Depending on the activity, I also have other sound settings (like Dynamic Volume/EQ) assigned to some of the other hard buttons. I don't really need the other audio controls that much and if I do, there's always also an iPad with the AVR control app in reach.
I also have turned off the page animations. You can still have the overlay slide in and out - or just toggle it without animating; both are possible.
Regarding your other projects: Don't know if you knew: you can control Denon/Marantz receivers also through a HTTP/XML API which doesn't have that "single connection only" limitation. They switched to a new web interface with the 2018 models, but AFAIK the XML API is still there.
The virtual extender/progress bar project sounds interesting. I don't have an extender, so I'm not really sure how they work in detail. Also, I haven't added any progress bars to my setup yet as I'm the only user and my action lists are usually not that long. I know they're finished when all the requested devices are on or off ;) But I'd love to see how this is done - If you're willing to write a little how-to, I'll be sure to try it out.