Maybe they've been burned by landlords in the past and are being very careful.You can legally reject them based on personality, facial tattoos, body odor, or other factors, but you better make sure you can prove that it wasn't based on any protected class like race, religion, familial status, etc.

As long as the city considers your property a true SF, you shouldn't have any issues getting this permitted (in theory, yet to see how some municipalities will handle this law).

.: Is it legal, per the IRS, to rent my primary home back to myself? 

All existing STRs with 2 days rented in the last year will be granted legal non-conforming status.  

The city already had a STR permit in place.Our permit will cost us about $500 per year.

I am about to buy my first property in Ohio and I would like to gain as much information as I can in regards to the different legal issues of which I can face in Ohio.

So, to try to go a legal route because they might have fixed something a little over the limit isn't going to work.You will have to face that you selected someone that was not the right fit and be more hands on. 

This is something their screening probably would have caught, or their system would have a legal procedure to deal with it.

Well anyone can write anything into a contract, but whether it is legal and enforceable is for the courts to decide...It is State law here that a contractor must call 811 or they are liable for the costs.

Duplex have different zoning that may permit additional units.