No, paypal never want photos - I've offered several times!
The most they'd want is for a professional to confirm in writing that it isn't as described. That would be if the seller disagreed with the dispute.
You have a good seller there, they sound genuine and helpful. Don't worry. They have more to lose than you I think! I wouldn't worry about photos as they have admitted they are at fault and yes, paypal do look at messages.
I had a seller send me a techno once that was sold 'as seen' and when I asked careful questions to check it was Ok, they lied over and over again...it arrived and was a heap, honestly it was awful and stank and was falling to pieces...dirt all over...they disagreed with my dispute, basically said 'ha ha you believed us' but the dickheads had sent all of it through ebay messages, and they lost
I checked with paypal who said messages do count apparently.
I'd offered to settle with them if they refunded part of it, so I could sell it on for scrap basically, and they said no, till paypal told us I'd won and to send it back for a full refund. that quickly changed their minds and they gave me £30 back out of £50. I sold it for £25 after a good clean up.