This is Part 1 of the response.

However if the LLC's purpose is asset protection, then the borrower on the mortgage needs to be the LLC.

…no part of a Lot or Dwelling shall be used or caused to be used or allowed or authorized in any way, directly or indirectly, for any business, commercial, manufacturing, mercantile, storing, vending, or other such nonresidential purposes…”.A short-term rental is a hotel.  

You need to make sure they do this or Chicago may just hold you financially responsible for an occupancy violation.

No response. 

Meanwhile I'm having to add several hundred dollars to my monthly expenses for the purpose of 'principle paydown'.Principle paydown PALES in comparison to appreciation.

Yes, as a short-term rental or long-term rental - either would work for the purposes of an investment property loan in the future.

What is the purpose of JV'ing vs just hiring him outright as a GC? 

Your CPA is likely concerned about the Personal Use Limitation, which is the biggest threat to the STR tax strategy.If you used the property for personal purposes for the greater of 14 days or 10% of the total days rented during the year, the IRS classifies it as a "residence."

For tax purposes, you're buying two properties.