1 it's a pleasure to hear that you are considering replacing the original built-in history feature. Most likely I'll add a checkbox in addon preference as a user option to override the hotkey.
2 it's a bit tricky, as there are lots of image types. One option is another option in preference that lets you configure to filter certain url patterns (urls having .jpg, .png, etc), but it sounds a little too heavyweight.
BTW, the reason that the history is flat for some websites very likely is that there's no thread info in Firefox history for such websites, not because the images are from different hosts. For example, I just tried opening some images in Image Search of a search engine, and all the links turn out to be flat instead of in a thread.
If that's the case, it'll happen not only to images, or any specific type of the urls. I've not found a good solution for it, and personally I actually have been trying to avoid visiting such websites in Firefox because of this.
Thanks again for your encouragement and suggestion.