I have a GWS mustang and had similar issues as you did. This is what I found out:
Finish
There are many threads on "glassing" foam airplanes to add strength and a smoother finish. The down side is they add weight. If you have lots of power (brushless) and can handle higher landing speeds it's not that bad. Decide what you want - appearence or performance.
Hinges
The supplied GWS paper hinges are actually quite strong. I did unscientific destructive testing between them and Dubro nylon hinges and the GWS were stronger. The stiffness is most likely extra glue or too tight of clearence between surfaces. Try some oil or baby powder to loosen em up.
Foam control surfaces
These are parkflyers. I too was concerned about the unprecise nature of foam surfaces. Mostly, its not a big deal if the inboard side deflects more than the outboard. This prevents stripping micro servos anyway. Over time the foam will wear away and stretch where the control rod goes in (bad). Balsa is a feasible alternative for not much extra weight. I cut small spanwise slits and then insert CF strips which are then drilled to accept the control rods. So far so good.
The split elevator however is a BIG problem. In any type of load situation the elevator halves deflect different amounts which introduces a rolling moment which is VERY annoying. There are threads on how some have used dual control rods but that seems heavy. It needs to be stiffer but I have not solved that one yet.
Lipos are very sensitive to over discharge! I've toyed with the idea of timing flights on my non lipo freindly ESC's but have so far chickened out. I suppose one could use motor calc or similar and figure out the "normal" flight times for a particular setup and then decrease that by a bit to have a safe margin. Seems like a bit of an unacceptable risk to me for an expensive batt pack - but to each his own.
That 3s 700 Mah Lipo pack you mention won't sustain a very large amp draw either. I'm guessing under 6 amps continuous. That leaves a kinda marginal setup using a gearbox or prop combination to keeps the amps that low. The 2s pack may be a better bet even at the lower volts. You'll have to look it up for your setup.
http://www.parkflyermotors.com/secur...or%20Chart.xls
Hope that helps.
BTW I am not by any means an expert on this stuff.