Coming in to this a bit late but I wanted to give my thoughts on the tournament. For background, I've played in several of the MLG Managrind open tournaments and I run the University of Cincinnati hearthstone club.
It seems there is some confusion around the game being pay to win. As in, just because players have legendaries and epics they will win even if they are a bad player. It's been proven time and time again that HS is about as pay to win as league of legends. Anyone with more cards only has the advantage of choosing from a larger pool to create a deck. Top players have made decks with nothing but free cards and made it to legend rank (top 500ish in NA) in just a couple days of playing. The only way I think someone could be hindered would be if they haven't unlocked even the free cards for a hero (which means they've probably played less than a few hours of the game ever). If you look at the top 2 decks in HS right now, Zoolock and mid-range hunter, you'll notice they are some of the easiest decks to make for newer players.
As far as how gameplay goes, I agree there shouldn't be over the shoulder coaching. It would be awesome to stream but I don't know how this would be possible unless the players didn't have access to the stream. Many time a player will hold on to a specific card till the end to make a play with it, so a 3-5 minute delay wouldn't work. Without booths to put players in, I think the best bet would be to just allow people to spectate over the shoulder of the players. You could also air the matches one game behind or have a viewing area where the 2 players competing couldn't see the stream.
My favorite way of hero selection is when you register with three heros, for your first match you pick one of the three and a deck you have for that hero. If you win you must use that deck again. If you lose you can choose one of your other two heros and a deck with that hero. This is a little different than Managrind, which makes you keep the same hero for all of your rounds (you can only change heros between matches). I've found the first way to be more fun.
Regards to other players seeing the decks being played, I think it's fine, it's the same thing as any other game at a LAN where if someone comes in with a neat trick, everyone else will know about it after the first game.
For your #2 (playing on other players accounts), this shouldn't be allowed. It would be like allowing a league player to use another players account who has a completely different champions and rune sets.
If you're interested in reading the rules from the MLG Managrind tournaments you can find them here
http://gamebattles.majorleaguegaming.com/pc/hearthstone-heroes-of-warcraft/tournament/na-managrind-open-27/rules
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