For the time being I plan on doing all the listing/advertising, data collection/analytics (excel), and payment collection myself (paypal/venmo) until I have enough properties that using a service like Cozy or Avail becomes cost and time effective.

Return on investment may be good because you could buy cheaper here and still collect regular rent. 

At the very least, you can consult with them and ask about their services and what the state requires to get an idea of what you would need to do without hiring them.  

The 5% interest is considered a regular interest income.

A tenant wants to sublet my property through Airbnb and provide me with a steady income higher than a regular rent, but I'm struggling with what kind of insurance I should be getting in this case.

It would take a 4.5% ROI just to cover your admin costs and break even.You could look at simply opening a self-directed IRA with a low fee custodian like IRA Services Trust Co in the Bay Area or Kingdom Trust Co in KY. 

The regular ferry has already had quite an effect in Bremerton and the surrounding area.

Apologies shift blame to youYes this business can be built off customer service and good tenant relationships.... treat people with respect and dignity....don't be an a-hole.

We have used two different ones and both have horrendous customer service, less than qualified contractors and inflated costs. 

Any skiptracing service should be able to help you out.