Hi,
We appreciate your patience with Registration. Also, let me begin by thanking you for your observations and recommendations. As you have noted, they have been taken into consideration with this release and we will continue to consider community comments for future releases.
Your first question is actually related to your last comments. The url_input option in the shortcode, will tell the plugin where to link the categories.
Keeping things simple, remember that your listings are initiated by shortcode, so its impossible for the plugin to know where to link to. As you can see on our http://whatlocalscallit.com example, the listings and categories are on the same page, so it operates as expected.
For the second question, you are definitely right. There has not been consideration placed in the hierarchy of the categories with the shortcode. Please paint a picture of how you envision this functionality working?
BePro Software Team