In the following i'll use the word physical for solid/material and virtual for ghost/spiritual. I try here to create the minimal postulates that could explain all the strange rules and strange ashes behaviour. Here they are. The existence of two seals : a protection seal and another one i call the full seal. The ability to cast a seal is a gift from the ancient people of the island. The full seal rules: -when a full sealed person kills another sealed (any seal type) person, the killer will die right away. -an unkilled full sealed person do not age. -the last full sealed person to be dead has the power to change his form into the form of any dead people (or perhaps only sealed ones), and take physical appearance in that form. The protection seal doesn't have any rule. The only benefit of the protection seal is through its interaction with the full seal first rule. End of theory, now lets apply it. Jacob and his brother have both been blessed with full seals, by their false mother who had the knowlegde. They too probably have the knowledge. Richard has probably been full sealed too, but don't have any knowledge. All candidates are blessed by jacob with protection seals.
Jacob's brother was the last full sealed to die. But when he died the source made him leave his body to enter the powerful smoke body, of course he could still take any form thanks to the full seal. When mib killed jacob, jacob was the last full sealed person to die, thus jacob took from his brother the ability to change his form at will, and is able to appear in a physical form. Thus mib, who wasn't the last full sealed person to be dead anymore, was stuck in his last form.
As far as I know, two people can at least see dead people in virtual form : jacob's brother and hurley. Mib walks in the jungle with richard. Jacob who took his young jacob's form, is seen by mib but not by richard who cannot see dead people. Later mib walks with sawyer. Jacob comes near them with the same form, but this time, a solid physical form. then mib thinks it is still a ghost. but sawyer sees him and thus mib run after jacob. Later mib walks with desmond. Jacob comes near them still in physical form, and both see him. Later jacob encounters hurley. Hurley can see dead people although jacob was in physical form, he didn't understood that. Then jack kate sawyer and hurley saw him in his physical form. There is some people able to contact dead people with some of the remains of the dead (we know Miles). That's why ilana took jacob's ashes when she heard that jacob died in the fire. And thus jacob burned his ashes so that he cannot be contacted, and prepared to leave the place forever in peace. But these ashes are not the same ashes as we use to see in the show. The bewitched ashes : This is normal ashes with a spell casted on it that forbids the smoke entity / or maybe any of the full sealed people, to pass through it, as long as the caster is alive. If the caster dies, the spell vanishes. The most secure ashes we could create are the ashes bewitched by jacob, because jacob is the most unlikely person to die : he is full sealed. Then the temple was secured with jacob bound ashes. When the japanese learned that jacob was dead, he realized that the ashes power securing the temple had vanish. Then he order to secure the temple with new ashes : ashes he bound with himself. Thus mib wasn't allowed to enter the inner temple. When sayid killed the japanese, the ashes power vanished and mib entered the temple to kill everyone. Let me know your feelings and see if something needs to be changed ? Ask questions to see if i'm able to answer them :)