I would add the suggestion to be prepared for the editor to request a look at the manuscript (not just a short sample) to prepare an accurate estimate. This has been my practice for some time, and it allows me to provide a flat fee for the entire project. This makes budgeting much less complicated for the author, although of course I am willing to bill by the hour if preferred.
Every author must decide what is important to him or her in an editor, but in these days of electronic communication, honestly I do not think it is important to seek a local editor unless your book is specifically related to something of local interest. Even in that case, you may benefit from the perspective of someone who does not have all the local knowledge it can be easy to presume, so that you can prepare your book for a wider audience.
Stephen, you’re right, and I think much of the confusion about editing and its pricing stems from the fact that editors offer a range of services (in addition to a range of experience). It might be best to view editing on a spectrum from broad (developmental) to detailed (copyediting and proofreading). And it’s always best to have as clear an idea as you can about the kind of editing you believe you need.
I was referred to Ebooklaunch by another author friend, after searching for the perfect cover and layout artist. I was about to give up, but once we emailed back and forth and I gave them the concept of what I had in mind, I thought I had nothing to lose. I was astounded by the design, for: Case of the Mouse Trap Legend. I was absolutely blown away - it far exceeded my expectations. I couldn't be more thrilled and will return in the future for more covers. Thank you very much!
Editors are an integral part of content generation at any level. A quality editor is responsible for the final, polished look and feel of any written content produced by a client. Freelance editors provide a flexible and talent-driven way to manage multiple products in a professional way. They can be used for a wide variety of projects, from editing for syntax and grammar on regular blog posts to providing structure, pacing, and style feedback for nearly finished novels.

While you may (or may not) be correct in your assumptions, your tone in general is rude, and disrespectful. If you are indeed a true editor of distinct taste and experience, you should not feel the need to bad mouth others for their thoughts and opinions. Show a little decency, and realize that you are indeed speaking to a human being, who probably has thoughts and feelings, and is in my opinion, a much more intelligent human for having the intellect to not attack someone verbally for their thoughts. No one needs you to be rude, or asked you for that matter.

After writing some of the book or a first draft of a book, some authors decide that they need more than an editor; they need a writer to take their writing to the next level, in order to get published or reach the level of sales they aim for.  I can refer aspiring authors to excellent, experienced co-writers, book doctors and ghostwriters, some of whom have worked on New York Times Bestsellers and other award-winning books. Find out more about ghostwriting services.

Regarding your last question, I know of no editor who gives a money-back guarantee for occasional errors that happen to slip through or for a different opinion by a later editor. I’m afraid such things are just the nature of the publishing beast. But by having a shorter portion edited first, you will get a decent feel for whether someone is the right editor for you, and will be able to be confident in his or her work on your entire book.