Visa on arrival and visa exempt entries are 2 different things. Visa on arrivals (the one you buy at the airport when you arrive) cannot be extended in country.
You can get pictures taken anywhere. If you're still in Canada, I'd recommend getting a few made now. CVS prints them for like $.50.
Yep, all the forms you need are at immigration. Every province has an immigration office, some are busier than others (bangkoks the busiest) but as a rule plan about 2 hours.
Visa exempt entries can be extended at any immigration office in Thailand for an additional 30 days for 1900 baht. You'll need a TM30 from your hotel or landlord, copies of your passport, a passport sized photo, and an application form.
Blacklisting only occurs (when surrendering at an airport) if the overstay is more than 90 days. If he overstayed 40 days he shouldn't be blacklisted, BUT he will almost certainly have trouble reentering if he trys to come back soon.