Great review. Nicely detailed with pics and video. I'm sorry the seven inch form factor doesn't appeal to you, oh well you can't please everyone. As far as typing you should try Swiftkey or Swype as they offer a better typing experience over the stock keyboard.
I've found Google Now has gotten better and better the longer I use it. I have had jellybean on my phone for a while now, and have had my N7 since launch. When I first used it, it didn't do much. Now it gives me "Places" when I'm near interesting stuff. It gives me directions to places I've searched for, without having to ask for them.
Yesterday, I took my daughter to the zoo in Syracuse. I live an hour and a half south. I searched for "Syracuse Zoo" the night before, to look at a map of the zoo to see where particular animals were. When I fired up Google Now the next morning before leaving, directions were ready to go.
I think Now will get more and more useful and functional as time goes on. It's still a very young product. Give it some time to mature, and you might find it becomes more useful.
I agree about Google Now learning as it goes. At launch, I think more than one reviewer said that it would probably take several weeks, or more, for Google Now to get accustomed to their movements. I am definitely anxious to see how it learns and gets better in the coming weeks.