> This problem is simply a flaw in sh (and its descendants)

Indeed, although it's not just sh; if you want to, say, make a table of filenames and some attributes of each file, you're in trouble if the filenames contain spaces (awk, cut, sort don't work as easily) and screwed if they contain newlines.

What does Plan 9 use instead of find?

> As for your second questions, the answer might be structural regular expressions:

I've actually been meaning to write a clone of the command line portion of sam, tack on some slightly more powerful features, and try living with it... it would be able to solve much of that use case, but I think it would be cleaner if all the normal tools just knew that the output of grep -C is, in fact, a list of multiline strings.