2) Wis seems a little high - any particular reason for the 14?
A little high? A toad has a Wis 14 :P

3) Why a special mechanism for Drop damage vs. just using DR? Say DR5/piercing during a Drop?
Because the way I did it is more in line with standard rules. Also, DR 5 would mean it'd still take damage for the rest of the way dropped. This way it ignores up to 16 points of falling damage.

4) Are koalas really that big? I thought they were only 3-4 feet tall.
The legend of the dropbear is that they are a good deal bigger than koalas (and also, a dwarf is Medium and its only 4 feet ;) )