Parent and Child Categories selection and display

I have two levels of categories, parent and child.

1. I want to allow free listings to only have one category, but the parent category is always selected, plus one child category, so they actually get into two categories. (see 2.)

2. When creating a listing I do not want ANYONE to be able to select a parent category – I want the Parent Category to be a header category only. If I don’t allow the parent category to be selected, will this break functionality elsewhere?

3. Is there anyway, now or planned, to present the categories in a hierarchy showing the Parent category and the child categories underneath. The current display is ugly and confusing. In the second image below, I only have two businesses listed but the categories are all over the place and it appears that I have 4 listings, not 2.