I'll be honest and admit that I didn't read your whole thread, but the simple question is did you try mixing the two formats on the timeline to see what the result was? Premiere Pro is fundamentally resolution independent which allows users to mix and match formats and let Premiere handle the heavy lifting.
When outputting, check the visual output tab on AME to ensure you don't have interlacing issues. Beyond that, it should be pretty straight forward.
If it were me, I would deinterlace the 25i footage and keep the project progressive. But it does really depend on what your final output requires.
Little difference in Contrast (Canon is better!!!)
Try using Premiere's color correction tools (fast color corrector, curves, etc.) for that.
I tried with Sony's XDCAM EX 1080 25i preset - but then the Progressive material seems to have lot of flickering.
Did you try interlacing the footage (Right click on clip, select "field options", and check "interlace consecutive frames")?
Cineform will give you the yellow line anyway.
Do not deinterlace your interlaced footage as you will be throwing away half you vertikal resolution. Which means qualityloss and we wont want that.
I would choose a hdv interlaced preset. 1080i50.
What will be your end product?