EDIT: In this post I use the term MS and UNC interchangeably, In my mind they mean the same thing, but some other's may disagree. My opinions are also in the framework of the US grading system, it's possible other systems may have different guidelines but I'm not aware of any that do.
1) The grading system seems to operate on the assumption of overall wear to the coin surface. If I have a coin that has had virtually no loss of detail to the high points but has a nasty scratch on a flat surface, how does that fit into the system?
This depends on the severity of the scratch, and the potential reason behind the scratch. If the coin was in the bottom of a 100,000 coin bag, the coin will likely have many extreme scratches, often called bag marks. This coin will get an MS grade, but a low MS grade. Many AU coins will look better than MS-60 or MS-61 coins, but not reach the MS designation because they have discernible wear. However if someone had a MS coin in a flip, and while removing the coin from a flip, accidentally scratched across the surface of a coin with a staple, this coin will likely have an "UNC Details- Scratched" designation from a grading service. In MS coins, the determination of whether or not a coin gets a "details" grade is mostly dependent on whether or not he scratches are the expected result of being in a bag of 100,000 like coins. Scratches of the latter result that I mentioned may get a pass from grading services if the coins is worn, the scratch is old(by this I mean "worn in" with the coin), and if the scratch isn't super distracting. The more worn a coin is, the more acceptable a scratch will be.
2) Does the term UNC have any real meaning? I ask because I saw a coin on EBay listed as UNC but an inspection of the picture had me wondering if it was stored in a working rock tumbler. Let's say I buy a hum dinger new coin from the mint and it falls from my pocket as I'm exiting the car. I discover it a week later by which time it's been run over 20 times and is in pretty bad shape . I sell it on ebay as UNC since technically, it has not been in circulation. Am thinking UNC has no real merit.
This depends, a coins that has a lot of scratches may technically be MS, as mentioned before, but I would never, ever trust the designation of UNC from an ebay seller. But not because of the scratches. Ebay sellers are motivated to market coins that are AU/UNC sliders and will likely try to pass off an AU(or even an XF or lower coin that's been polished) coin as an UNC coin by photographing it in deceiving light or even manipulating the photos. An example of what you're talking about would help but generally scratches will not necessarily disqualify a coin from being UNC, especially when talking about lager coins like silver dollars. Morgan dollars
are excellent examples of what you are describing. if you go here: https://www.PCGS.com/photograde#/Morgan/Grades
you will see that the MS-60 Graded Morgan is beat to heck but the AU-58 Morgan is comparatively unscathed. In my opinion, even XF morgans are more appealing than that MS-60 or 61 Morgan. When it comes to grading coins wear is the paramount factor in designating grade. scratches or bag marks will onl;y play a factor in determining just how UNC a coins is, or maybe discern whether a coin deserves AU-55 or AU-58.