I was hoping I could sell it to the LLC for $1 or do a quit claim deed or something similar, but she says no.

I know this is a bit late of a response, but as others mentioned - forming in DE would be good IF you were running an internet based business where the online business could be 'located' in DE, but since operations are virtual you wouldn't necessarily have to claim operation and thus register as a foreign LLC in CA ...Having said that we are obviously talking RE business here ... given that your speaking directly to a cluster of property in MO, I would think a Series LLC would be the way to go (thats what I'm currently leaning towards as i'm forming an entity to house a portfolio in MO myself)..

All available siblings would have to participate.Tthis is a process that gives all parties who may have interest in the property to make a claim within a certain time frame, if no claim is made by the missing sibling whoever filed the action will be awarded free and clear title..

Where am I being completely unrealistic, naive, and inexperienced?

Speaking strictly from a claims standpoint, (if you had a loss that you needed to file a claim) the umbrella would likely be the better option, as sometimes something that may be denied under your liability policy may be  covered under an umbrella policy.

You might do well to specify investors with experience settling an ACV claim.  

If I were to "purchase" a property "subject to" the existing mortgage, could a quit claim deed be used since the seller is in a must sell position, and if so how would you profit from using a quit claim versus signing the contract for the seller to keep the financing in their name fo 3 years?

Quit claim's are easy, but they aren't as solid of a transfer mechanism.  

In other words...if their payment on the house was $1,000...and they could show that they claimed say....$1,000 a month in rental payments...teh lender will consider 70% or in this case $700 towards the payment. 

Currently there is a tenant in one of the units that the current owner claims is the ideal tenant.