Being the DM of a Scion of Arkhosia I've dealt with these questions, and I've found a few things.
First, the paragon path is pretty weak compared to other paths. It's not often the stat for the attack roll and the stat for the damage roll are your primary and secondary stat (unless you're a dragonborn con-lock, which seems... sub-par), so you're usually losing out on one (it seems more cases you're losing out on damage).
Second, the flight utility at level 12 is pretty overrated. Flight is something I generally encourage in my games, so your mileage may vary, but I like it when players can do off-the-wall crazy things. I house-ruled this power so that the player could fly and charge at the same time (he's a charge-centric warlord). I've also seen house rules that do one or more of the following:
-Let the player use athletics to reduce falling damage
-Give the player a +2 untyped bonus to Athletics checks to jump
-Lets the player treat every Athletics check to jump as if he had a running start.
-Fly with the movement made in a charge
There was more but I can't remember if off the top of my head (it was an old thread that had this stuff). I like the first and last option, and would consider adding one of those extra perks to make the utility more favorable and fun.
The overland speed of 12 is pretty subpar too, unless your player is a good role-player and can find interesting uses for it.
In the end, if your player picked the Scion of Arkhosia path, chances are they did it more for flavor than cheesing it up, so don't be afraid to give a little bit to have fun with. Of course, if they try and take the whole mile, you can revoke the house rules.
Oh, and about feats for dragon breath: I don't let any of them affect the paragon path powers. I DID however give the player a weapon that let him add its enchant bonus to his damage rolls with his breath weapon and paragon path powers; hasn't done much harm at all, since he gets, at most, +6 damage per encounter (it's a +3 weapon, with two powers it affects at his level).