Current mirror circuit across a MOSFET: Help needed in understanding the working
The circuit approximates an ideal diode, it is described in detail here: Ideal Diode
If Vin>Vo, M1 is driven hard on. If Vin

I mostly agree. 

Q1 in this configuration is called a diode connected BJT, its behaviour is slightly different to a diode but your reasoning seems sound. 

Regarding the regulation of V2, to determine the relationship between V2 and iLoad (load regulation) you might consider that the Q1,Q2,R1,R2 circuit is a differential V amplifier, the output V of which drives M1 in its linear mode (approximating a Voltage controlled R). So the load regulation will depend on the amplifiers V gain together with M1's Vgs,Rdson specs.

No, I dont believe this is a current mirror...closer to a 'long tailed pair'?

I agree, the body diode is redundant.