I've been pondering your suggestions for a few days. This is going to be a rather bad week in terms of work for me, but I'll try to start working on revisions for this.
I agree that the report section should probably be completely rewritten. The format I used for Charlie, Angel would work well, with the detective reporting to his superior.
With regards to the second part, I think it works better doing just that single scene rather than breaking it off into either a flashback or a separate scene with his sister. I'll have to think about it some more; bulking it up with more description would likely help make it more satisfying.