As for the above, yes, C1 should help slow down the clear coat failure... to what extent, I am not sure as I have not tested it in that way.
As for your father in law's car, for a DIY'er I would recommend going through with a 2 step correction using the Griot's polisher.
Product list with links to Detailing.com's pages:
-Griot's Garage 6" Polisher with 25ft. cord. (25ft. cord as it seems to make the machine have more power. i.e. more electricity flow)
Griot's Garage GEN3 Random Orbital Polisher w/ 25 ft. cord - 6 inch
-Meguiar's 5" backing plate. The 5-5.5" pads are much better to work with than big 6-6" pads
Meguiar's Backing Plate for Orbital/DA Polishers, W67DA - 5 inch, MEG-W67DA
-Meguiar's 5" Microfiber pads, I use 4-6 pads over a whole car, sometimes more if it is very bad.
Meguiar's Microfiber Cutting Discs, DMC5 - 5 inch (2 pack), MEG-DMC5
-Lake Country Tangerine & Crimson 5.5" low-profile pads. I would have at least 4 of each of these, depending on the paint type, one or the other will finish down better. Make sure to get the low-profile ones as they are much easier to work with on a DA.
Lake Country Hydro-Tech Crimson Foam Ultra Finishing Pad - 5.5 inch, low profile, LC-H2O-1255-130MM
Lake Country Hydro-Tech Tangerine Foam Light Polishing Pad - 5.5 inch, low profile, LC-H2O-2255-130MM
-I would typically recommend Scholl's S3 Gold compound as the go-to cutting step but Detailing.com does not carry it. Menzerna FG400 is another very good compound which will give you some great results in terms of cut & finish
Menzerna Fast Gloss, FG400 - 16 oz.
-While it may be rather expensive, Sonax Perfect Finish really can give a perfect finish to nearly any paint type.
Sonax Profiline Perfect Finish - 1000 ml
1st step of correction: Meguiar's MF Pad with Menzerna FG400
2nd step of correction: Lake Country Tangerine or Crimson pad with Sonax Perfect Finish
I'll throw this video in as it is very good at explaining basic paint-correction technique, it is part 1 of 2
Part 1 - How to remove swirls, scratches and water spots using a Porter Cable 7424XP Polisher - YouTube
With the Griots machine, I never go above speed 4.5 as that is all you should need to perform heavy correction.
As for the headlights, I would recommend picking up the Meguiar's 3" backing plate for the Griot's machine along with the 3" counterparts to the pads I listed above. You can use the FG400 & 3" microfiber pad to correct the headlights and then finish out with the Perfect Finish.
As for the paint chips, there looks to be too many to touch up and would most likely need a respray if you wanted to get rid of all of them. It looks like there could also be some scratches that are too deep to remove completely. Overall it should look like a completely different car when you're done.
Let me know if you need more information than this