Derek:
I am hearing you. I agree that we have not yet achieved perfection. Note the following:
The bags are designed around different size pads. The Long Bag will fit a 25" mattress. Since they are built on the mattress, the sizes actually have more to do with width than length, so if you are a 25" mattress guy like me, you would choose the LONG even if you are not over 6". We make an adjustable sleeve that fits both which we use on the double bags which hit the market this month.
The pillow thing is indeed an issue. If we made it so it fit pillows and your head inside it is too floppy in the cases that you don't want your head in the "hook" (95% of the time). But I agree it is tight with a thick pillow on the inside, especially for back sleepers. I am a pillow guy too, but also a stomach sleeper mostly, so it is not an issue. But for back/side sleepers, it can be.
We played endlessly (still playing with it, actually) on where to put the bottom of the "hook". In the end, we purposely kept it right at waist level so that you can sit up without pulling on the bed/pad, but so that the "hook" closure is as small and easy to tuck as possible.
Most people have the impression that a zipperless bag will be cold, so we went for a more approachable "snugger" fit. In order for the hook to work properly, you can't extend the hole much lower than the pad sleeve or it will begin to open and you will lose the "hook". So it is a balance. But it could go one baffle lower, or even lower if we extended the pad sleeve.
The biggest thing that I have learned with the Backcountry Bed, which has surprised me and is totally contrary to perception, is that this is an EXCELLENT COLD weather bag. It looks more like a warm weather bag to those used to mummies, but the opposite is actually the case. It is way better in colder weather than warmer weather in my opinion.