Miles / Hours Conversion Factor. In the past 30 miles/hour was assumed to make a conversion between miles and time.
Quality / Environmental Conversion Factors. Yes, your observation is correct, most ignore the conversion factors all together when dealing with mechanical items found in NPRD-95. The conversion factors in the Toolkit are based on MIL-HDBK-217, which really only applies to electronics.
Choosing a Failure Rate. I think the industry standard is to do exactly as you mention, make a best engineering estimate based on all information availability that is traceable to a single NPRD entry. These are “rough estimates.”