If I was willing to live with a 9" tread at the 12" walk-line I would make the stair width 44 1/2 inches and be done with it. To maintain the 48" wide stair you would have to reduce the number of stair treads or allow the tread at the 12" walk-line to be less than 9". It appears that the 1 & 2 family dwelling code in Cleveland is the 2006 IRC but it is not clear to me if it has been modified by amendments. In any case here it is: R311.5.3.2 Tread depth. "The minimum tread depth shall be 10 inches. The tread depth shall be measured horizontally between the vertical planes of the foremost projection of adjacent treads and at a right angle to the tread's leading edge. The greatest tread depth within any flight of stairs shall not exceed the smallest by more than 3/8 inch. Winder treads shall have a minimum tread depth of 10 inches measured as above at a point 12 inches from the side where the treads are narrower. Winder treads shall have a minimum tread depth of 6 inches at any point. Within any flight of stairs, the largest winder tread depth at the 12 inch walk line shall not exceed the smallest by more than 3/8 inch." Even if this building code has been modified locally, because it is has been the national standard for so many years, I would insist that the designers adhere to it. Ask them what code they are using and why it might be more appropriate than the IRC. I've designed enough buildings to know that being reputable doesn't mean you can't make a seemingly amateurish mistake.

You can use a painting pad, but those will follow the line of the ceiling so if it is not straight, your paint line will not be straight. One way to get above stairs is to put the extension ladder at the bottom of the stairs and then run a plank from that ladder to another ladder at the top of the stairs which is usually a step ladder. You can also use a brush clip mounted on an extension pole, but that is very hard to control to make straight cuts. Many times though above stairs there is only about 4-6 feet that I can't reach so the brush clip works for cutting in only that small section.

Yes, if you paint the wall (the paneling) the same colors, top and bottom and paint the chair rail that color also, it will make it all joint together and disappear sotaspeak. Then paint the doors the white color as your other white in-house. You can paint the kick molding (shoe molding) or you can leave it the same color as your (dentil work, etc) molding at the top. In fact, I think I would paint the room the same color, yellow, green, gold, whatever, and then paint the doors like the other white trim in your house. Leave the shoe and quarter-round molding in the stain color and leave the stain at the top. I have seen this done before and it looks good. Then you have the white colors which connect to your foyer, your main color and only the color of the molding as a third color. Your room will look united and larger, more open. Another trick is to line paneling with cheap wallpaper and paint over it. They used to sell what is called wallpaper lining for that specific purpose, to hide the "creases/dents" in your paneling but most people do not mind them (I don't). But, if you do, you can spackle or grout them, whatever it is called, or you can just buy cheap-as-dirt wallpaper to put over the paneling and paint that.

I would match them, but I would also consider replacing the entry one with a recessed light with a narrow beam. since you can only really see that one from the top of the stairs anyway. the other option would be to lower the one by the front door to make it stand alone then maybe you could mix them.