A "veneer plaster system" is often called "blueboard" and is usually about 1/16" of plaster over 1/2" gypsum drywall although it can have a double coating. Blueboard is much harder, tougher, easier to repair, and holds paint longer than taped drywall even with a level 5 finish. In markets where "blueboard" is common it is often cheaper than any other system. Where it is not common it might be more expensive. The plaster finish on blueboard is so hard and beautiful that it can be left unpainted. I don't know if that would look modern Mediterranean or not. In an earthquake any drywall system would probably have the same resistance to cracking. If the exterior structural shell and foundation are unable to successfully resist lateral movement you can't expect the interior walls and finishes to do so.

I was waiting until one of the pros on this forum answered. Speaking as an amateur, I would advise against using an orbital sander on your walls. You are likely to take the paper cover off and end up in worse shape than when you started. Skim coating is the answer, and hiring someone to do it is your best bet. I watched a guy do it, asked a lot of questions and learned how to do it. But someone who can do it well will do it with far less sanding and dust. If you are going to do this yourself, do some reading on skim coating. You want joint compound, not spackle. Spackle is for holes. And you want to sand by hand, not a machine.

Holes this size can be fixed by getting some mesh drywall tape and wadding it up so it fits tightly in the hole, below the surface. Then cover with joint compound and scrape level with a taping knife. Put on another coat or two as the compound will shrink in. Once it is level, you can lightly sand (only if needed), prime, and paint.

I have Level 5 drywall with flat paint and 3 years after completed there are no visible imperfections. You are not being unreasonable in your expectations of the work and I would not accept the drywall finish either. With the trowel marks of the skim coat and uneven finish this work may be hard to "cover up" and may take a knock down finish on the ceiling to cover the mistakes. As far as waiting 10 months...I would get it fixed now and get something...if you paid for level 5 finish and have it in writing I don't see how you could lose a civil case on this and I would not let up...that is terrible workmanship.