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Doesn't it result in a lit of heat from the friction? Or is that only a problem at much higher speeds?

There will be heat; even the suborbital Mercury-Redstone missions needed heat shields.

I don't know how SpaceX is planning on handling that. Maybe the trajectory they put themselves on is going to be slow enough to survive reentry using just the main engine nozzles as make-shift heat shields?

Can't speak to the plan for the second stage (which will do a once-around and de-orbit if I understand correctly), but the first stage will not be following a ballistic trajectory and re-entry like a normal suborbital launch. Its goal is to return to the pad a few minutes after launch.

I suspect they will still do a single burn somewhere around apogee of the first stage; if I understand correctly they are well into their gravity turn by the time it separates so they'll have some horizontal velocity they will need to get rid of.

Maybe they are going to push the gravity turn later into the flight so that the first stage doesn't participate in that as much?

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