To be clear, all colleges will list what the applications requirements are on their website, and different colleges require different things . Some colleges require no transcripts with the application (e.g. UC).some only ask for HS transcripts (e.g. Stanford); some ask for all transcripts (e.g. Michigan). So just because your DD did not submit DE transcripts should not be construed by others to mean that it what they should do.
I highly doubt it. Auditing, at most schools, means attending lectures, but not the small sections, and not doing the written work. If one wants to (potentially) show rigor without worrying about GPA mpact, take it P/F.
I think the point being made is that grades earned in DE courses can have impact doen the line. For example (and I’m simplifying), DE grades for pre-meds “count” as part of their GPA for med school application regardless of whether they are part of the undergraduate GPA.
Schools set up their own weighting parameters. But often, courses not taken at the HS are not weighted.