1. I know there isnt such an option, but is it viable to modify the codes to show the average rating of an album based on ratings for individual photos? If so, how to place the PAL on the sidebar or index page?
Correct not an option and you would have to code up such a modification.
2. Is there any way to modify the view counter so that it is based on cookies and IP ie. the user with the same IP and cookie only increase the count by 1 no matter how many times he/she view the photo.
We already enter views by knowing if a user is logged in etc and track IP but each view is just that a view so if you want to not increment the view count if someone wants to view twice then you would have to create such a mod.
3. Is there an option to reset the view/rating counter?
Reset the views for a photo? Not without modifying the views count in the mysql table field in table pp_photos.
Just remember code modification is something you would do and not supported by our company nor is it the responsibility of our company to tell you how to mod things.