I don't think they are going to add many features... In fact I think it will come out way before tvOS 10. The current release of tvOS 9 actually has support for the app. Apple also said that it would be released early this year... So they are already running pretty late on it... I bet they release it in July sometime.
No, it will release alongside iOS 10.
Regarding volume, yes that would be nice, but it would (of course) have to be CEC volume control given the lack of IR on iOS devices, and how many TVs support that? Far far far less than those that support CEC power on/off. You can see why it would be excluded, at least for now. Could easily be added in the future (but does your TV even support it?).
There is a small regression away from browsing your local library content and playing it back on Apple TV, but you have to see how that experience differs from the rest of the entire AppleTV UI. Browsing local library is literally 1 App, of the countless you can have on AppleTV now. Doesn't make sense to maintain support for that.
Not to mention, that was before there were new ways of interacting with AppleTV, ie, touchpad, Siri. And yes, Siri does not yet support the local library, but eventually it may. Maybe. Its hard to say how valid that would be with the potential for questionable metadata.
I've since moved on to using Plex as its a much better AppleTV experience, and being a 3rd party app it has much greater potential for Siri support (especially since they have their own custom metadata inclusion experience which can augment what is is needed for Siri).