This story is quite refreshing and original. It is quite amusing to see your Harry come face to face with all the plotholes in the story. Keep it up!
One thing about Rant #4 in chapter 6. I always felt it was actually a little realistic that Quirrell did not attack Harry with lethal magic. I mean he had Voldemort at the back of his head and the last time Voldemort attacked Harry the spell reflected back. Actually, I think if Voldemort had been smart, he would have smothered the baby-Harry with a pillow and avoided any magic/prophecy conflicts. :)
Also, it is true that like others have said, there is no real reason for Dumbledore not to hire Lockhart. I mean in Canon many people truly believed he was skilled. The real question is, why did Lockhart apply to the position in the first place? I mean he must have known that he would be exposed as a fraud when his lack of ability was revealed. He must be atleast somewhat clever to have managed to manipulate things to the extent that he did to gain his reputation. Maybe he just started believing his own lies.
@DaphneGreengrass: Maybe Lily was highly skilled at magic and performed some bizarre spell to protect Harry, the last component of which is death of the caster or something. As good as explanation as any for why only her sacrifice worked. As for burning people to death, I dont understand that? The ward on Harry's person could be keyed to attack Voldemort only and no one else.