As a preamble, as far as I now the development of this mod has ended, mostly. It's still possible though that the two develpers will start working on it again, as I hope
Your questions touch a very important point (for me). The nobility-possession-vassallage thing in M&B (and every mod I've seen so far) is very very limited.
I'm trying to change that. So far, there are a few scripted things, like the "original home" of some of the lords (Haringoth castle, for example). They can be seen in the
module_scripts.py file, in the script "game_start".
The effect of this thing is not very high, but if I remember well you cannot use the "exchange fief" option with these lords with a "home", and there should be a penalty when you ask them to join your kingdom if you own or have assigned to other lords their "homes".
I would like to implement an hereditary system and a more realistic vassallage. In the middle age "lord" and "vassal" where realative terms, not absolute: you are a lord of something, and if somebody swear an oath of homage to you, he becomes your vassal. Doesn't matter if you are the lord of the stables and your vassals have just to clean horses' waste
In the system I'm implementing, dukes are vassals of the king and own towns (one and only one), counts are vassals of the dukes and own castles (only one too), barons are vassals of the counts and own villages (from 1 to 3). They have to pay a little part of their taxes to the "upper-level" lord, and are normally bound to him (if a lord decides to follow the marshall, all his vassals and vassals of vassals will do the same unless they plan to betray him or the relation with him is very bad).
Knights, instead, are also of noble birth but are landless: they can become vassals of barons, counts, dukes or directly of the king, with increasing difficulty to be accepted and different duties (can be to manage their lord's fiefs, to protect them while they are at war, to follow them, to send messages for them (not like the stupid quest, but with a meaning, to have back a conquered fief for a great sum or to end a war). They get renown and sometimes some money, but do not have an income: being a knight was a difficult job.
I'm using the svn version of diplomacy, whouse sources you can browse here: http://www.assembla.com/code/diplomacy/subversion/nodes/trunk/src?rev=85
Sadly, nobody can follow you through the sources and explain how things work, but there are plenty of topics in the "Forge" subforum on how to change things and understand what's going on.
If you find that you have the will to spend some good hours playing around the sources, you'll eventually, in a few days, start to modify things and try them loading the game...and it's amazing, I can tell you
If you decide to do this and have some precise questions that are not clearly answered in the topics in the "Forge", you can PM me and I'll be happy to reply.