As I understand the way that life peerages operate, Nellie, the wives (husbands are unaffected) and children enjoy all of the privileges of the wives and children of an hereditary peerage, except that the peerage title, itself, is not inherited. The children of life peers are entitled to use the Hon, for example, or, in the case of a life Dukedom, lord or lady first name. (In the Edinburgh case, of course, there are subsidiary titles for the son to use.)
Regarding your point a: when titles become extinct the relict (I couldn't resist) continues to use her title as do the children, if any.
Regarding point b: extinct hereditary titles are not usually recreated during the life of the widow or daughters of the previous title holder, except where their agreement has been, explicitly, sought and received by the crown. I imagine (and hope) that this courtesy would extended to a life-Dukedom, but we shall have to wait and see.
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