Severus was prejudiced against Muggles just like 100% of the wizarding world, from Tom Riddle to Albus Dumbledore. He disregarded her just like all wizards disregard Muggles. This is the mainstream wizarding view. In fact it is the only wizarding view on the topic. We have no evidence he hurt her on purpose, unless you consider Harry blowing up Marge a deliberate act. He was angry, his anger caused magic. It is a common occurrence with magical children.
As for Lily - Severus was aware that anti-Muggleborn prejudice existed in the wizarding world, but he did not buy into it until he lived in a subculture where such attitudes were the norm. He believed she could be in Slytherin, for Merlin's sake. (My guess is Eileen thought Tom Riddle had been a Muggle-born, so it seemed possible.) The one who completely disregarded someone's feelings in that pair was Lily who wouldn't pay attention to what he had to say when he was nearly killed. And the way she used his humiliation as an opportunity to flirt with James rather than being helpful disgusts me. As for trying to control feelings - just listen to James! He attempts to coerce her into dating him by threatening her friend! And 'Don't make me hex you' - placing the responsibility on her if *he* hexes her - those are the words of an abuser. Which is one reason I don't buy the 'James matured' claim without evidence. One does not grow out of abusive tendencies just like that. The whole 'stalking' thing is completely dubious - he was a lonely and under-socialized kid looking for company. Really horrible.
Dark Arts: Major BS. We do not have any definition of what Dark Arts are, by anyone in canon. Dark Arts are whatever Gryffindors say they are, but only when non-Gryffindors do them. We have Aurors who are supposed to be Dark wizard catchers, but we have Dark Arts shops operating legally. Per Rowling's web pages curses are Dark Arts and hexes are close to Dark Arts, but Petrificus Totalus is the Body-Bind Curse, in canon. So I don't care if anyone calls a spell Dark or non-Dark, I care to what use it is put and how much harm it causes when used like that. James was using a household cleaning spell to waterboard Severus. Severus uses a potentially lethal spell in a controlled manner (non-verbal and very little wand movement to limit the damage) to inflict a minor cut that left no scars. In any case, of the spells we know Severus wrote in his book Sectumsempra was the only one more harmful than what typically goes on at Hogwarts, he intended it 'for enemies' at a time he already nearly died at their hands and he used it with careful judgment, even when extremely provoked. (As for it being his 'specialty' - looks like another one of Remus' over-dramatized descriptions. Since Sirius did not know Severus was a Death Eater, Remus must have been referring to their school days, and we see how and when he used it then.)
Adult Severus: What blatant favoritism of Slytherins? He never gives them a single House point in our view. He never takes any points from them either, but then, they behave respectfully in class. He once(!) praised Draco's work, but Hermione's grade was higher than his in the end. Slytherins have the brains to only misbehave when his back is turned (and we see them looking out). He takes points from Gryffindors when they are disrespectful, come unprepared to class, arrive late, talk out of turn, yell at him, attempt to tell him how to run his class. All good reasons. He gives detentions for similar behaviors. (We don't know how his lessons with Ravenclaws and Hufflepuffs go - probably rather smoothly, between those who might find the subject interesting and those who believe in the value of work and are naturally respectful of authority.)
His major fault as a teacher is that he is inflexible in his methods. He knows one way to teach, it works with some, not others. I see his strictness partly as his nature and partly as his way of making sure that even the less aware students would be safe in his class, out of fear of him if not out of understanding the procedure and its dangers. As a result he is exasperated with students who do not respond as expected. Yes, he insults students. Big deal. I had plenty of teachers insult me and my classmates. If they knew their stuff, if they had something of substance to say to us we shrugged the insults off. Probably the only time he seriously crossed boundaries with insults was with Hermione's teeth. He had good reasons to be embittered with her after she had committed crimes against him and betrayed his trust several times already, but he shouldn't have taken it out on her like that. As for Neville's toad (in case you bring it up) - we know it was not the first time his toad was present in class and it really had no business being there, it was dangerous, whether as a distraction or as a potentially unexpected ingredient if it were to hop into a cauldron. And by leaving Hermione within Neville's hearing range Severus knew the potion would turn out safe. (We also know he has antidotes at hand.)
Shrieking Shack: No, he did not know Sirius was not the traitor. Voldemort had 3 spies (Severus, Peter and Rookwood), and the logical thing is not to let them know of each other's identity (even if they knew of the existence of other spies) to keep them from giving one another in if caught. Don't forget Death Eaters were cloaked and masked when they gathered (and we don't even know when Peter got his Mark - logically it would only have been after he brought the secret of the Potters to Voldemort because before that there was risk of discovery). Ron and Peter were the first to enter the tunnel, by the time Severus saw Remus on the map Peter was no longer visible. His words to Harry about how he could have died like his father out of trusting Sirius is evidence he did not know who the spy had been (when he loses control in anger Severus yells the truth, to lie he needs to be in control of himself).
What Severus knew was that Remus wasn't safe, because he was delaying taking his potion to the last minute (as we saw him do earlier that year) and instead of being where Severus could reach him in time he went on the grounds when the moon was about to rise. So either Severus went to the Shack with the intent of locking Remus in for the night or he assumed that he was going to meet with Sirius based on his understandable belief the two had been in collaboration (after all Remus was indeed hiding information about Sirius, though not for the reason Severus suspected). When he found Harry's cloak he knew the kids were there too, so he went in to save them from the unsafe werewolf and the mass murderer. (Or if he saw Harry or Hermione on the map then he went to the Shack with the intent to protect them in the first place.) Since from outside the door he didn't hear signs of violence or any immediate danger he slipped in. And he heard Remus admitting to being a serial liar (mostly by omission) and the Marauders to have repeatedly committed a crime that got Hagrid expelled (setting a XXXXX Dark Creature loose in a populated area). And the kids trust the two of them! They even go and attack him, who came to protect them! Obviously they must have been Confunded to show such stupid lack of judgment! Why would anyone in hir right mind trust Remus or Sirius?
Yes, he intended to bring Sirius to Fudge, to be taken care of by the law (note that he did not sic dementors on him when he had the opportunity to do so) - exactly what Harry intended to do with Peter, exactly what any responsible citizen was expected to do.
As for Severus being vengeful - he talks about revenge, but actually he behaves in the most forgiving and compassionate way to people who nearly killed him, to an employer who repeatedly undermined him in front of students and to ungrateful bratty kids who attacked him several times (PS and POA), stole from him and endangered their peers in his class (COS). If you ever get him fired from a school in your area, send him over to mine.
Percy: Percy's familiarity with Harry is the entire point because there was no reason for him to think that Dumbledore - however careless he thought he might have been - would stoop to trying to control Harry just to pretend Voldemort had returned.
Excuse me? Dumbledore is a Machiavelian manipulator and Byzantine plotter. Other than killing people at his own hand he stooped to pretty much everything, including betraying his own supporters (I include James, Lily, Alastor and Severus at the very least, possibly Emmeline too as well as some of the other Order deaths in the first war). He collected people, bought their undying loyalty with very little effort on his part and *he* had the temerity to warn Harry from Slughorn. Even if we limit ourselves to what Percy knew, Harry was implicated in the escape of the mass-murderer who had injured Ron. As for Arthur and Molly - I am sure Percy believed they were sincere in their trust in Dumbledore, and mistaken.
As for not recognizing the difference in Crouch's behavior - Percy only knew him for 2 months before the Imperius. The entire Department of Magical Law Enforcement was incapable of telling who was really Imperiurized in the first war and who wasn't. The entire village of Hogsmeade wasn't able to notice Rosmerta had been Imperiurized for many months. And Dumbledore himself couldn't notice that his old friend and comrade at arms was being impersonated by another. So I don't see why anyone would expect more from an 18 year old newbie. You may not think Percy did much in his first year in the Ministry, but his perception was that he rose to a challenge that was dropped on him unexpectedly and pulled it off.
Ernie: I don't see that Harry liked him, he merely tolerated his presence even when he was one of the few people who believed him.
Cedric: I do not think he is exceptional for Hufflepuff, because the traits for which Dumbledore eulogizes him are the typical traits of Hufflepuff - especially the fairness which he exhibits time and again. The Triwizard Tournament is a curious event: it is a competition between individuals, but especially for young people success depends not only on the ability of the champion but largely on the network of support s/he manages to recruit in order to prepare for the tasks. Harry only lasts because he has the unfair support of an insider, his natural support network consists of just Ron and Hermione, who really aren't up to it. I would expect a Hufflepuff to be the most suited for this kind of competition (followed by Slytherin, Gryffindor and lastly Ravenclaw) because they are best at the social skills.
Luna: She is a kind person with a well-developed moral sense but her irrationality drives me crazy. I wouldn't have been able to spend much time in her presence.