Labor Theory of Value

Not sure I get the reference, but elaborate please. What further steps would you take?

That is like saying money isn't a product. Just because it is used for exchange doesn't make it outside the system.

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The expenditure of labour itself is the action that creates value; labour is the "value-creating substance", as Marx called it. Labour power, i.e. the capacity to perform labour, has its own value, that being the amount of labour necessary to reproduce it (i.e. to produce food etc.) - but labour itself cannot be measured in terms of how much labour it contains.

Not saying to read the whole book, but the first chapter of Capital explains all of this pretty well: marxists.org/archive/marx/works/1867-c1/ch01.htm#S1

The only way this increases value is by increasing density of labor (IE, how hard people work or how consistently). Meaning it will result in surplus anyway.
Look, you seem to be somewhat interested in the topic. Just read Capital already.

The exchange value fiat money represents is clearly different from its value as a piece of paper.

yeah
Does it have to be a capitalist giving directions? The person conducting an orchestra usually doesn't own the place or the instruments used. It doesn't follow from the opinion that some people need orders to be productive that the means of production must be privately owned.

Strangest political compass I have ever seen.

People are paid a pre determined wage, no matter how much they will produce for the capitalist in the eg. 8 hour work day. He pays their ability to work not by how much they produce. They get paid x, even if theybproduce more than x (or less, but such a company will go bankrupt soon).

Average hours of human labor required to produce the good.

More specifically the socially necessary labour time to produce similar generalized goods as demanded by the rest of the economy