I wasn't sure how to repond to this thread, but I am a former SKYW guy that did the CRJ FO-EMB CA transition. I too had never flown the EMB. The training program is fast paced, and they do expect a lot during the first type ride, especially if it is also your ATP ride. I received almost the same questions on my EMB and CRJ orals.
As what TW said, up or out, is different than qualify in turn. Failing a checkride is also not the end of your career. I interviewed at NWA with a couple of people who had failed checkrides, and they were hired. They don't get the PRIA paperwork until after you interview and have a chance to explain what happened.
As for whether an airline can require an F/O to hold a first class medical, most legacy carriers do. I must hold a first class medical, but I am only required to take it once a year, no matter what age.