2. Is BA the responsible carrier being a BA ticket and BA flight numbers or is it Iberia being the last operator of the metal?
Iberia is responsible.
3. I know I can buy essentials and try to claim back, however if instead I use hotel express laundry on the single change of clothes in my cabin luggage can I claim that back or am I better buying limited new items. Laundry is chaeper but will BA see it that way?
This question is better asked on Iberia's forum as their policy will apply.
I remember when my bags were delayed and IB was the last carrier all I got was a package with an oversized underwear and T-shirt and toothbrush/toothpaste.
That was it. The agent did not mention anything about buying any clothes, instead telling me to call IB, which I did not. I was flying back home the next day.