Congratulations on a serious 3D object! Not sure about the holes... could be that it needed just one more stitch in there. I am working on a pair of socks myself and the pattern that I printed out for inspiration called for M1 in that particular spot.
As for 'ladders', the stretched stitches between the needles, there are two things you could do:
1. Pull the yarn somewhat tighter when you make the first stitch on the left needle.
2. Change the spot between needles by slipping a few stitches from one needle to another every 3-4 rows. So, if you had say 10 and 10 on each, make it 8 and 12 and then 12 and 8.
Hope that helps.