Does your camera give you the option to change your JPEG file parameters? I save Fine*/Large JPEGs (minimal compression, full resolution). The are almost exactly half the size of the corresponding raw files. When memory was expensive and card sizes were limited, it was common for cameras (either by default or user choice) to brutally compress image files of significantly reduced resolution from what the camera originally produced. I agree that these versions, sometimes only 8-10% size of a Fine*/Large file, are little more than thumbnails. My dad has a whole hard drive and a bunch of CDs of some pretty important snapshots that he thought he was being really frugal y saving as tiny files. They are pretty universally unusable for printing in any size.

Simply, a JPG editor is a photo editor that edits jpg files. PS is a jpg editor. A raw editor is one capable of editing at least one of the RAW file formats. Adobe Raw is a RAW editor. Sorry I confused you, was trying to keep it simple.

In the past, possibly still, when you load a RAW file into a raw editor, you only edit color and exposure type stuff. If you want to use the jpg tools such as clone stamps, haze removal tools, warp tools and so on it converts it to a raster file and those tools are used for stuff like replacing heads, removing poles, garbage cans, zits and so on. JPG editors also have all the color stuff available as well.

Ysarex said he uses clone tools and the like in his raw editor which is new to me. I'm waiting for some links on this subject.
I oft wondered why raw editors didn't have these sorts of tools. I guess because of the non-standard raw file types, but that's just a wild guess.

So that's a great family photo of good times -- well done! You listed things that could be corrected in editing with a raster editor. Begs the question then why didn't you do it? All three RGB channels in the photo are clipping and it shows in the photo. You don't care, it doesn't matter to you, or you can't see it and that's fine. Enjoy your photo. What you can't do is claim that it's technically just as good as if it were processed from a raw file by someone who knows what they're doing. Do you see the banding in the sky and how it changes color toward cyan as it nears the trees? That's because the blue channel is badly blown out. That's fine if you don't see it and/or it doesn't bother you. But it's there and no photographer would do that deliberately because they think it's good -- it's bad. Doesn't bother you, enjoy your photo it's a good captured moment.

Now if you didn't cause the clipping in all three RGB channels and don't have an original to revert to then you can't fix it in a raster editor. Clipped channels means data is missing and you have no data to edit. All you can do is take the blown data and darken it and that can look worse than leaving it blown.

If your jpg processing doesn't measure up, shoot RAW. JPG is not for everyone. When I say raw is not worth the effort, It should be understood I'm speaking for myself, not everyone. I've noted several times that for some, like billnikon, shooting RAW may be the only way to shoot. When I speak of raw zealots, I'm not necessarily talking about you just because you always shoot in raw. A raw zealot is one who constantly pontificates that RAW is for everyone, and exaggerates to the extreme the benefits of raw. There are a small handful of those, and when they show up, I enjoy the banter. BTW, I often shoot in RAW and never to my knowledge insinuated that no one should ever shoot in raw. It's benefits for most, imo, is the last thing most need.