Stolen iphone - why didn't it notifiy me when it connected to the internet?

Question

I have a couple of questions.  First, my son's iphone was stolen a few weeks ago.  Within an hour it was noticed and we put it in lost mode.  It was no where to be found.  We left it on our sprint account, hoping that when it got turned on, it would be locked when it connected to the internet.  Last night, evidently it connected because it was no longer activated, and it had my number on the lock screen.  Someone, claming they bought it from someone else, said they had my number and they called me.  I got it back, and I am ridiculously lucky.
But not really happy with apple.
On my phone, I had my son's icloud email added.  CS said that as soon as it gets connected to the internet, I'd get an email notifying me where it was.  No such thing happened.  In fact, when I went to get the phone out of lost mode, it was deactivated, and location settings were turned off.  I got a very unhelpful email that the phone was found, which I was aware of since it was in my hand. Where was that email?
My other question is that the person who gave it to me insisted that they could have wiped it, even with it in lost mode, and she was being super honest and wanted credit for her honesty - which I'm not a theif and I didn't see anyone giving me credit for not stealing anything I see not bolted down.  That was particularly annoying, though I remained gracious and thanked her profusely. 
Is that really possible?  This was the latest update of 7.1.1 .  And why didn't we get notified of where it was?  I think she thought we could find her, which is why I think she gave it back. Othewise, it might just be lost forever.  I'm fairly certain that the person who stole it thought we'd give up and get it off our account, and the internet would never connect to notify us of where it was.  Glad I was patient.
So educate me - how is this REALLY supposed to work?
It also was a beast to restore.  It forever couldn't connect to the servers through my wifi in my house.  I finally gave up and in the morning it did what it was supposed to.  It truly was a nightmare, not even counting the whole stress of the phone being stolen in the first place.  I wondered if it was possible that there was any kind of a virus put on it (I know, I know - apple is supposed to be virus free) or perhaps it might have been cloned.  It was exceptionally frustrating that the phone wasn't working properly.  When we updated it, it had wiped itself and we had to start from scratch (6 weeks ago) and it behaved much the same last night.

Answer 1

If you did not disable access to control center from the lockscreen, then it is trivially easy to put it in airplane mode in an attempt to prevent it from being wiped or locked.
If Find my iPhone is active, which it apparently was, there is no way the phone could be wiped and used without the password for your Apple ID. It can be wiped, but it can't be activated or used after that. It's a brick without your credentials.
I'm not a trusting person, I would tend to believe that the person who gave you your phone back was a disgruntled thief who realized they had more chance of getting you to cough up a reward than they did of being able to use the phone, or, at best, someone who knowingly purchased a stolen phone from someone and discovered the same thing.
I would have called the police.