At first look, I didn't recognised that it's a hand, after reading the above quote where you said that it's a hand and looked again at the image. I still can't recognise that it is a hand. I don't know why but I'm pretty sure that my eyes are working fine. It seems like a yellow person looking at some sort of files in his hand and in side view.  Though, I love those stars of yours more than these hands They're quite simple and looks good.

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You might be right. But this badge will somehow encourage members that is too lazy to use "report to Moderator" button. It may cause suffering but Moderators are the only one who will encounter such problems that's why you have nothing to worry about. It seemed they agreed with it (also some members including me) so there's no much problem.

And how can you assure that many will report unnecessarily, don't you have trust in our fellow members? 
It's voluntary, it's up to them if they want to participate reporting. If they want to achieve the badge then they will surely help but if they don't want to, it will be just fine too. No punishment.
Actually you can see how many reports you have if you've already reported more than 50, but yes you were right, it's not shown in profile. Just click "Report to Moderator" button from any reply and you'll be able to see something like this.
After reaching 300 Good Reports you will be able to see your report history.
Something like BTCforJOE said might included in the implementation of the badge. If the pointer of the mouse is hovered in the badge a text will show up giving you information about how many Good Reports, bad reports and unhandled reports you have.

And yes, there will be no benefit. Like what I said it's just voluntary.

Any further questions?