Question 1: which. Question 2: that.
I think its the first one the sentence looks fine with out a comma.
Answer:
His view point changed about his heritage.
Explanation:
He used to be embarrassed by his grandpas appearance, but through out the story he learns to cope with who he is and his Indian heritage. He also doesn't mind the medicine bag anymore.
The theme is A birthday of my life
The answer would be, The ship watched Icarus fall