@srinvp you're always bringing the good stuff.
1. If you've got rations, camping before going back to town is a good call. It's not obvious that's the case, so a warning in the text would be nice. It would also be a great GM move to say "As soon as you get back to town, you're getting put to work. If you camp first, you can recover before your shift (and without having to pay for it."
2. They do not. Injured / Sick do not impact recovery. It would be such a cruel spiral if they did.
3. I never considered it. I'd say they can't decline. They need to hit that hump of development at some point, and the veteran benefits will be nice down the road.