Riker's demotion to commander has a few ways that it could be handwaved. For one, it was a field promotion due to the emergency. Had Picard been killed or otherwise not recovered, then it likely would have been permanent. (One alternate timeline in "Parallels" confirms that in such event, it would've been permanent.) In addition, he likely took a voluntary demotion and preferred to stay in his old post.
It's also possible Starfleet was extremely suspicious of Picard, yet couldn't just slough him off because of his considerably positive record and that he was, in fact, a POW that helped defeat the Borg. He was a hero of heroes, but Starfleet didn't immediately understand what the Borg had done to him. But aside from loyalty, they couldn't just throw away his battle prowess and knowledge against the Borg. Keeping Riker on the Enterprise worked because Riker had previously shown hesitance to leave the ship.
Guinan says to Riker that he has to let Picard go - Admiral Hansen says that "a great man has been lost". He also says that Picard was "a casualty of war". That sets up the Curb-Stomp Battle at Wolf 359. The Borg use Picard's knowledge against Starfleet - including Picard's knowledge of Admiral Hansen. It wasn't so much as a Didn't See That Coming - more that Hansen was blinded by grief.
Compared to other Borg drones, Locutus's implants are a lot less visibly invasive - His Undeathly Pallor is a lot more subtle, and the distinctive Borg ocular implant is replaced with a headpiece that merely surrounds one of his eyes like a mask instead of replacing it entirely. Out-of-Universe, this is likely a result of the writers not wanting to restrict their lead actor's ability to emote with extensive prosthetics. In-Universe, Locutus being visibly more human was probably intentional on the part of the Collective, to make his role as the "speaker" to humanity easier.
The Borg ship was damaged significantly in the Battle of Wolf 359 which is why it didn't immediately head toward Earth and the Enterprise had to track its direction by following eddy currents. It needed time to repair and didn't want to immediately risk another battle.
In Part I, Shelby is leading discussions of how to stop the Borg when Riker orders everybody to go get some rest. In Part II, they stop the Borg by Data ordering them all to go into their regeneration cycle, or go get rest.
In Part II, after Guinan leaves the ready room, Riker lets out a small noise when he sits in the captain's chair at the desk. That could either be him vocally resigning himself to what's about to come, or it could be Jon Frakes expressing pain since he had to sit in the chair normally instead of stepping over the back to compensate for his back injury.
. That could either be him vocally resigning himself to what's about to come, or it could be Jon Frakes expressing pain since he had to sit in the chair normally instead of stepping over the back to compensate for his back injury.