The fact you don't know one of these answers scares the crap out of me, but I'll leave that for a second.

We both still work full time and will for the next seven years barring our health stays good. 

As an engineer, electricity doesn't scare me in the slightest.

If your employer is paying benefits like health insurance, retirement match, dental, vision, disability insurance, etc. increase your $40,000 salary by about 25% to cover that part of your compensation package.Real estate agents follow the 80/20 rule.  80% of the commissions to 20% of the agents. 

Kinda but not really, by dollar value alone probably yes in that if you flip a $1.5M home you will make more than a $150k flip but no in that the returns aren't as good, there is more competition for distressed properties and less properties that have something wrong enough to scare off a retail buyer. 

You need to look over the financials, the budget, and the reserve study to understand the financial health. $125 sounds about right or possibly low. 

BUT don’t let that scare you off, it’s just a hurdle you can get over.

We are not scared of doing a full gut rehab because our dad owns a construction company and is fully capable.

Wonderful news about your son's health. 

Framing also looks in good shape with solid footings under beams.My assumption here is, given the scope of the  work to fix, this will require the town's sewer dept and/or health dept to get involved.I'm trying to decide if I should wait out the seller to fix and keep going through with closing or just take back my earnest money and keep looking for something less problematic from a sewage/sewer perspective.