Congratulations. Sounds like a great Airhead.
They are noisy when shifting. Takes some getting used to. Most Airhead riders use "pre-shifting" and say it helps. Before the clutch is pulled in the toe is lifted just enough to remove free play then the shift is performed the standard way. Another technique is to shift with out using the clutch. It is allowed and works better once you get the hang of it.
There should be a kill switch. Sounds like you have a non standard right hand control? The kill switch is a red toggle on the right? Maybe your Grand Dad knows what happened to it.
The side stand and the center stand are more quirky features of the Airheads. There are after market options. The Reynolds Ride Off Center Stands are no longer made I believe but show up at flea markets and such. Probably not really worth the money these days for the Reynolds. But there is a good option for the side stand and it is still made. It is the Brown Side Stand. Also a couple of others are still made but I think the Brown is the most popular.
The bags sound like Krauser's but the wiring does not sound standard. Maybe somebody added some lights?
As far as modifying the front brake there are volumes written on this subject. The handle bar MC is a good beginning. Changing to another style caliper gets involved and is not mentioned often on these forums.