Yes, there are absolutely plans to make install app logic smarter!
Currently, image render in the feed similar to apollo. However... are you viewing on mobile or desktop? Is there a particular post that's problematic? I might add more logic around this, but for mobile in portrait, it should be intended. Note that in the post page, there is a height limitation to 50% viewport. Oh, and a compact feed view is planned!
Yeah, I need to write a privacy policy. I'll get this done today or tomorrow.
The short instance list is just for an MVP. I definitely plan on expanding it!
You can also choose any instance by adjusting the URL on the posts page. For example, (assuming you're logged out) you can view midwest.social with the following link: https://wefwef.app/posts/midwest.social/all. However, you make a good point about being selective - I might create a blacklist, as I don't want wefwef to be used by hate groups.