1). It's called darwinism. 7 points are easy enough to get around here with a little effort, don't make the extra 2 points that separate the best from the rest a cake walk. I had no problem firing bums who didn't do their work when I was a head grader, you just have to create a competitive atmosphere.
2). This is a shot in the dark but unless that 'actual great people' list is established you will always have conflicts of interest because graders are a dime a dozen, and they don't know any better. There will probably be conflict of interest regardless of how that fleshes out. It is one grade and one opinion; it should not be assumed that it is how everyone views the point task.