They don't want you to back out, but you don't want to lose out in case something happens outside of your control and causes additional delays.Can you counter and request paid extensions?

Living next to your tenant can cause some dilemmas. 

The boric acid worked great but one or two scorpions still show up on occasion and I feel it will cause problems with STR.

I suppose it can go as far as ending up in court, etc, possibly causing closing delays with another Buyer, but I would think the Original Buyer may be held responsible for any damages their delay may have caused the Seller.

This caused us to do more research and ultimately decided to use a different insurance company and PM.

The following clauses in the agreement seem a bit weird to me, are these normal:The Property Owner shall obtain and maintain full control of renewal of property and liability insurance coverage naming the Property Manager as co-insured, including fire and a minimum of $100,000 liability coverage; the Manager has no duty or responsibility with respect to any insurance coverage.In the event the Owner enters an agreement for sale of the property, or an agreement to list the property for sale, Owner agrees Manager may terminate this agreement immediately, without any advance notice to the Owner.This Agreement may be terminated without cause at any time by either party with a sixty (60) day written Notice of Termination.

The last 3 have really caused us alot of problems and money. 

this is clearly a stressful time and causes inconvenience for them.

I feel like I have a decent grasp on the how to go about my first real estate investing venture but my nervousness has caused me to hold back.

He could really be a creep and you could lose good tenants cause no one wants to live with them.