2 - 3.
Kill off the rest of the party, and play them all as ghosts.
2 - 3.
My suggestion: Allow him to sense the world around him and communicate telepathically with other PCs, but only manifest as a ghost once per day for 1 minute. However, when possessing a creature of CR less than or equal to his level (or the party's level), he can sustain possession even after his manifestation expires.
The idea is that except in unusual cases, he'll spend most of his time walking around in some possessed creature's skin. The CR limit keeps him from grabbing anything too grotesque.