1. No, your expectations are not out of line. There is no requirement in the warranty that they have to give you a loaner, but that is also true of most auto company warranties as well. And many auto companies cover loaners for extended down time, while many dealers also offer loaners for short periods. It's called good customer relations which helps lead to owner loyalty, word of mouth advertising, and future business. Unfortunately, that's not a big thing for H-D or many of their dealerships. They are still in the "if you don't like how we do business, tough chit" mode. Is this the dealership where you spent over $32k (about $6k profit) to buy the bike? If it is, I'd arrange a sit down with the dealer and have a little discussion about your reasonable expectations. And if he blows you off, you need to find another place to spend your money in the future. Need a part? I'd ride a hundred miles to a different dealership before I'd spend a dime in a place that blows me off. When everyone adopts that attitude, things will change.
2. What do you mean by "fix it right"? Definitely the H-D engine touch-up paint isn't a proper fix, and I wouldn't accept it. That's the response many others with the same engine peeling problem have reported, and so far I don't remember anyone reporting an acceptable result with that BS. I'm not sure what else you expect, but I think it's safe to say that a complete engine replacement isn't likely. So the alternative is tearing the engine down completely, sending the cases either to a qualified powder coating company for stripping, prepping, and powder coating, or back to H-D for replacement with new cases. Is this what the dealership is telling you they plan to do, or do they have some other idea like tearing it down partially and spraying it themselves with paint? If that's their plan, and they don't do it right, then all you will end up with is the loss of use of your bike for 10 days and still have a crappy finish on the engine that will probably peel again. Get it sorted out first, so you don't waste 10 days and then have to go through all of it again.
3. That "only replace one part" crap has been pulled on some other folks on this site as well, usually those who live near the ocean. Is the dealership trying to say your chrome isn't defective, and the peeling is due to atmospheric conditions or some such BS, but they will replace one part as a "goodwill adjustment"? If so, they will need to provide proof that the parts are damaged and not just defective plating. They and H-D don't get to just blow you off on warranty, they have to comply with Federal and State laws regarding warranty coverage. And you don't necessarily have to go to the expense of hiring a lawyer, small claims court works pretty well for this kind of stuff. BTW, I lived in Virginia Beach for over 16 years and never once had a chrome issue on any of my cars or my motorcycles (Yamaha's and Honda's). The only reason H-D is having issues with chrome is because they buy cheap parts with cheap plating. Good parts with good plating will withstand hundreds of hours of salt spray testing without even pitting, much less peeling.
I suggest you contact H-D directly and speak to a manager in Customer Service. You are definitely not the first and only person to have the paint peeling or chrome peeling issues, and I'm quite certain you won't be the first to call in with complaints. Be polite but persistent, and you might actually find one of the few competent folks on the payroll who will decide to do the right thing to make a customer satisfied. There have been a few reports of such things happening.
Jerry