With regards to BIAB, I used a bag in my 10 gallon cooler/mash tun for the last several brews and intend to continue doing due to the results. The bag I'm using is claimed to be able to handle 100 lbs. of grain and water, I believe it probably can. With the bag I find I can get away with a slightly finer crush of the grain which seems to result in reduced mash times and increased yield, and still have fairly fast runoff. I do batch sparge. The last batch the SG of the initial runoff was 1.071 and the sparge was 1.031 so I guess you decide whether or not you want to recover that extra stuff. With the bag I am able to recover more wort than I could with either the cooler mash tun alone, or mashing in my G2 with a false bottom, and the whole process is much easier. When I'm done I simply take the bag out to the compost pile and dump it.
As for increasing the volume of the batch, if you don't adjust your ingredient list accordingly your OG will obviously be lower than it otherwise would be.
Hope this helps.