They don't need admin approval, they can change their email/password in their profile from the Pilot Center.
I fixed the 'move to pending' bug for the next update.
Any pending pilot's that are declined are deleted. This is as designed, for people who register but are denied, that's as designed.
And if you delete a pilot, you're doing that - deleting them. So all their data goes as well. At first they were not deleted, but many wanted the ability to delete a pilot. Once you delete, all their data will go with them, but I'm changing this behavior by adding a "retired" flag, to keep them in an inactive state. But deleting yes, often cases you want to delete the pilot. Also if a pilot is deleted, but their data kept, that data is in an orphaned state, and won't be picked up.
In terms of financials, it won't erase any financials for previous months, unless in the next update, a pilot is retired.