Xbox – how to use microsoft rewards points

Did they refund the cost of all 1500 points or just 340? If you spent most of the points and they refunded the cost of all 1500 I wouldn't say anything -- just go buy some more points and enjoy somewhat-free DLCs. This might not be the honest thing to do, but MS can't do anything about it since the money was already refunded to your credit card.

If you were just refunded the cost of 340 points then they probably had a problem with Live or maybe some kind of big update to their store system, which made them give a refund to everyone who used their debit card to buy points. (They can't refund points from a points card.) Try asking other people that use debit cards to buy points if they got refunds too.

To answer the first half of your question: as mentioned in this answer, anyone can play DLC on the console on which you purchased it. (Because it is also linked to your XBL account, you can also play it on any console.)

I know there is some way to set up some kind of "family" setup so you can control what your children buy and play, but I don't know any details on that. Hopefully someone else can fill in those blanks.