Surprisingly enough because of low taxes and interest rates the numbers in certain ways seem to work out. 

Only to find that the IRS came to the house serving a Tax Warrant on the owner.  

So, yes, you need to the primary insurance, e.g. the homeowner's/landlord policy.While this doesn't "replace" a LLC, it serves a similar function since the insurance is now mitigating your liability risk. 

Hire a PM, avoid liability and quit wasting your time.

but it sounds like you know a lot of what you DON'T want; what you do want is the opposite. if you're going to do your next project alone, it sounds like you want a LTR nearby that's relatively turnkey without any problem-tenants. you can do a 'lazy 1031' where you just sell traditionally & in the same calendar year buy the new property, while working with your cpa to figure out how to offset the tax bill. you could alternatively partner with an active investor on your next deal; that way you could invest in what could be a higher cashflow market compared to where you live, and not have to invest much time (since it sounds like you guys don't have as much time to spend on this now). 

Or any other legal/liability paperwork for that matter? 

Your umbrella typically applies when the liability on your underlying policy is exhausted.

It does and “some” protection but certainly not complete liability protection.

If you do 1031 exchange multiple times, do you pay taxes on the profit of only the last sold property or do you have to pay taxes on the total potential profits of all properties.

Something like "unfortunately at this time I do need to raise rent due to increased property taxes, insurance costs, etc.