0. you're right
1. you're right..not allowed
2. it CAN be done into Beijing but not Shanghai. And its not that bad of an option. Unless my math is completely wrong (entirely possible at this time of the morning) The BA schedule is only 6 hours longer than the NW schedule. And they can stopover in London to break up the trip if they want.
3. WBC definitely isn't as nice as BA First, but using NW does offer you a few more options, such as open jaw into PEK and out of SHA (if they want to see both cities) or a stopover in NRT. And 6 hours less flight time is still significant to most people.
Hope this helps