I think A is a valid reason for atonement. While the Paladin may not have 'known' he was releasing the fiend, he certainly should have suspected it and acted more carefully.
I think with B and C are not good reasons for atonement unless you really want to enforce a Lawful Stupid alignment. I don't think fleeing from an opponent you cannot possibly defeat is cowardice, especially if the Paladin is trying to save someone in the process. The fact that the demon said he wouldn't kill them really means little because 1) There is little reason to take its word and 2) Even if it did just leave them KO'd there is no guarantee something else won't come to finish the job.
We use heroscape tiles for our battles, which can take a few minutes to setup since you need to snap them together. Sometimes if there is a quick encounter I'll just put the mini's on the table and just estimate distances.
I used to not use minis at all, but I actually found that even though minis make the setup take longer they make up for it by speeding up the rest of the combat. With no minis my players were constantly asking "How far away is X" or "Will a line hit X and Y?" etc. Also, I'm running a game with 8 players right now so there are just too many guys in combat to keep track of in my head sometimes.