Featured terms of a vocab to be shown in a view

http://i.imgur.com/5NxMKnb.png
1.) So I am trying to turn the vocab (left) into a view block (right).

Vocab/terms have field signifying 'featured' terms as check box..
I would like it to show first 'featured' parent then, then its featured children, then to next parent.. etc.
If children are marked as featured but its parent is not, then it wont show.

2.) Also, only having the image from the first child showing.

I then wonder if I have image on term.. what if i want another image for term to be shown in other place? how would i tell view to use a specific image for one block but other image for another block?

Should I make this a menu instead?

Most of the time I am in irc.freenode.net #drupal as BrandonC