Cheryl has answered most of the questions above, and better than I could.

I only add that Henry and his sister know full well that they have no influence over Frederick (and that their father doesn't mind F's behavior as long as it doesn't affect him directly).
Since they can do nothing, they are content to let F's actions bring Isabella's essential triviality and lack of integrity into the open.

Also, since Catherine's family can do nothing about the General's conduct, they refuse to brood upon it. What could they do except write him a nasty letter, which would have been useless.

James could have issued a challenge, but it doesn't seem part of his character, and duels were not really acceptable in law, even though they occurred. And, too, the real culprit is Isabella.
Remember Henry's comment that a man does not object to his beloved being admired. It is only the woman who can make it a torment