Integration with locales module

I feel there are some issues with this module. I generally like it and it's the kind of feature I want to use on my web site. But I feel this needs to be more closely integrated with the locale module.
Since I believe the main function of the translation module is to translate nodes on a need-for basis the following would be helpful.

While the user interface is one thing, some nodes would be translated into the same language as the installed locales. However they don't appear in the selection box, which only displays 'unsupported' languages. Ideally I would want to be able to translate nodes into one of the installed locale languages (or any other) and then give them priority depending on the selected user interface language. For example, if the home page has a page or a story, translated into English and say Japanese, with these language also installed as user interface options. The user with the English UI should then see the English article (with an option to view the japanese one if he should open up the detailed view) and the user with the Japanese UI, viewing the same home page should only see the Japanese version. This would of course require that translated nodes inherit their display settings and permissions from the master (original) node, as well as checking the UI language and seeing if a node has a translation for this language before displaying the page.

Currently it's hard to translate image nodes since an image node in 'add' mode requires you to upload a new image, when you really just want to reference the original (or actually be given a choice, should the graphics too need to be translated).