Bud is often established as being plenty smart (though his Butt Monkey status means he can't actually succeed with anything), so why is Kelly so dense? A flashback in one episode revealed that Kelly was extremely smart as a child before bumping her head in a car trip. The occasional Genius Ditz moments she has are the signs of her pre-brain damage potential.
Sounds more like Fridge Horror. Also, due to constant Continuity Snarl, this point is a bit moot, as later on it was established that Bud developed much faster than she did.
In season 11, ep. 10, when Peggy gets amnesia, Al eventually becomes interested in her again by the end of the episode, and quickly went back to being disgusted by her when she regained her memory. This implies that Al doesn’t find Peggy so repulsive because of her looks (frankly, Katey Segal is a very good-looking woman), but because of her repulsive personality.
It was heavily implied that Al was a major jerk and asshole in high school. The 'Bundy Curse' and his status as an eternal loser, are Karmic justice for that behavior. Al ensures his status in life never changes by continuing to act like a jerk. The more he lashes out about his crappy lot in life, the worse his life is.
"If You Could See Me Now" shows Al getting glasses because his eyesight is shockingly bad, a plot point contradicted by any number of previous episodes. However, this episode takes place in Season 6, the All Just a Dream season, so of course it goes off continuity - it probably did so deliberately!
Seven appearing on the milk carton was obviously a lampshade, but in-universe, this means Seven just went missing one day and nobody cares about finding him! (And no, this isn't Fridge Horror, since that term implies that somebody out there would be horrified by the idea of Seven going missing.)