Hey, thanks for the feedback!
(1) Yes, you are perfectly right, the original owner is notified by email, SMS and push notification when a recovery is initiated by his guardian(s). This is the only reason why we ask users for email and phone and users always have the possibility to opt out (but then will no longer be notified in case of e.g. recovery).
(2) No, no more seed! Users don't even need to know that there is a private key stored on their phone. Our main objective is to abstract all the blockchain complexity (keys, seed, gas, etc). To give you the bigger picture this private key does not hold any ETH (hence we don't mind loosing it) and is only a "remote control" for the Wallet: it signs transactions off-chain and these transactions are then relayed to the blockchain (using our own implementation of EIP1077).
Our contracts are currently being audited and we will make them public once the audit is completed. But I'll be happy to share more details here or in another topic.