re: Dave Hirsch source. See Siman Ayin Heh. I forget which sif kattan (but is the one which discusses saying krias shema in front of a woman whose hair is uncovered so is easy to find), but the Biur Halacha offers a synopsis of the shittos. He discusses the general chiyuv of a married woman to cover her hair and says that in her own home she does not have to keep it covered. I believe he says is a good idea that she do so so anyway, not because of hilchos tznius but because of hilchos brachos, so that her husband may say devorim shebikdusha (such as making a bracha, saying krias shema). He brings the Mogen Avraham who writes in the name of the Zohar (maybe its the AriZal) who says a woman should cover her hair even in the privacy of her own home, I am pretty sure it comes from Kimchis – but really dont remember). He brings, the Chasam Sofer was noheg to be machmir like the Magen Avraham, but most poskim are not. I am willing to bet that many who are arguing it is halacha to keep hair covered, ALA Kimchis, are chassidishe or otherwise of Hungarian extraction, while those who say it is a middas chassidusta are of Litvish extraction.
Regarding covering the knee. It depends on how one defines “Shok”. I was told (meaning, I have NO source to offer you other than the person who told me so please dont ask) the Mishna Berura says this means the area “below the knee”. Anything above the “shok” is an erva and below is not. Where the “shok” begins and ends is according, to my understanding, an area of disagreement among poskim. Top of knee, bottom of knee, somewhere in the middle, much further down the leg closer to ankle. My own Rav says that it is clear the MB says the “shok” means the knee and while he has no proof one way or the other, to define it as the lowest possible portion of the knee, he said that he knows others might feel it is a bit higher up. He also said that the MB agrees that if the minhag of women (and I believe it means jewish women)is to cover a certain part of the body, then in that city/town/area that part of the body is considered an erva. While not a conclusive proof to this concept, the Ben Ish Chai writes that “those areas of the arm which are normally uncovered, the kaf (palm) and etzbaos (fingers) are not an erva”. Living in Bagdhad where women probably dressed in the full Moslem levush (and jewish women probably had to dress the same way) it was the minhag for all other parts of the arm to be covered and he considred it an ervah.
Bottom line. Follow your family Rav.