Mark McRae:

Let's take your questions from the bottom up.

I don't know about the availability of hemlock -  but I had not before heard this. Shocking price increase, however.

The compost they are finishing up at this time of year should have plenty of softer plant materials, not just wood. Also, the process used at the PRC consistently heats the materials to 160 deg F PLUS - I would not expect termites nor their eggs to survive that. I think I would apply their compost right up to the foundation of my house, but it's a poured concrete foundation. If your foundation is different, you might make a different choice. The cedar shakes begin about a foot above ground level.

Yes, you can mulch flower beds with PRC compost. I would probably ask to see an analysis, which will include N-P-K and especially viable seed count. If you're buying directly from the depot at the landfill, I would call the office for this information - likely the folks at the scale house will not know. If you are buying from a landscape supply service, they should have this information.