Installer is 90% right...
Your installer sounds like he knows what he is doing, but has some personal preferences coloring his opinions. May not be wrong, just opionated. First, probably does need to do a moisture test(s) if there is any doubt, but I assume he may have already done so.
Most glues for hardwood on concrete contain a moisture barrier as part of the formula. Assuming what he uses is like this there is no need to use a sealer.
I'm leary of "sealers." In many cases a sealer must be REMOVED before gluing down - otherwise it prevents proper adhesion and the glue may peel up like paint. (I've seen paint peel up on a sealed concrete floor, luckily before we glued down wood on another part of the suite.)
I've never seen anyone use an engineered UNFINISHED wood, though I suppose there is no reason not to. My question is how thick is the wear layer? Many engineered woods have a very thin wear layer and if you sand very deeply you are up **** creek. I disagree that a sand & stain floor gives a finish superior to prefinished. The opposite is true if all other factors are anywhere close to comparable. Same wood, but stain is applied under controlled factory conditions, typically 7 to 10 layers of poly plus aluminum oxide instead of just 3 layers of poly done on-site.
Biggest reason people say they like a S&S floor is the square edges instead of beveled edge on prefinished. Is your engineered unfinished floor square-edge or beveled? Installers tend to treat unfinished wood rough, counting on the sanding to make up for "boo boos." So a lot of installers don't like prefinished because they have to actually take care while installing.
Prefinished floors will not fade any faster than S/S. The reverse is probably true, but any floor will change color - look at any of them where part has had a lot of direct sunlight, covered by an area rug, etc. The quality of the wood and finish regardless of prefinished or S/S probably has more impact.
One of my vendors has added the stair tread things you describe and I'm thinking about adding a display. Haven't installed any, but everything looks good about them. Essentially is cheaper/faster/easier to install over particle board or pine treads than tearing out the staircase, having a finish carpenter install new treads, then sanding and finishing.
As far as nailing plywood over concrete so you can nail down a solid hardwood floor, I think doing so is goofy. I know people who have done it and claim it came out okay, but I have my doubts and think most will develop problems of some kind down the road. Just goofy - it's usually someone who doesn't know jack about anything except 3/4' solid trying to get around his limitations. But that's just my opinion...
Good luck!