Yep, on that first part but every attack just passes through and yes they instance the same. You see a player, you target said player, it lets you know that their PVP flag is "OFF" under the "ship info panel" You either engage in conversation or move on with your life. You see another ship, PVP flag is "ON" and you engage as you wish.
Simple.
It would indeed be simple to implement, and would have headed off scores of complaints over the last three years.
I guess the Developers don't consider it consistent with a vision of the galaxy within which every man or woman in a spaceship is, at all times, under very real threat of losing their life. Where a hardy few take that colossal risk for colossal reward.
Check the missions boards. Many of the same guys who want PvP Immortality want to be the very embodiment of the God of Death so far as the helpless "Kill 100+ NPC's" are concerned.
As another forum-user once said, this is a power trip.
Put another way - if Frontier ever effectively preclude PvP threat for all, I hope that they include some really super-deadly NPC's who cause a lot of players to lose their ships.
Anything else is so one-sided as to really amount to playing something like Total War Warhammer, on Easy Mode, with Mods enabled that prevent the AI factions using anything that can possibly harm the player. That is currently where Solo is, with skilled PvE players having to self-handicap to achieve some kind of challenge.
I suppose what I'm saying is that every time a Cmdr undocks from a station, in Open, in Private, or in Solo, they should do so with a real sense of fear and imminent threat - in any ship, in any mode, with any mods. Mitigated somewhat by system security level, I would hope and accept - but never totally going away, except for the misguided.
I imagine that's what the NPC's do.