Pricing, retouching and licensing

I've primarily been an architecture/interiors and product shooter. Over the years I've done headshots here and there as part of a magazine feature I shot or for friends. I'm expanding my business now to add headshots & corporate portraits as a more dedicated part of my services.

My question is mainly with regard to retouching and pricing. I know all markets will have some variety, but how have most of you handled retouching as part of your pricing package. And for retouching, I'm defining it as going beyond standard exposure/color adjustments and going into Photoshop to clear blemishes, fix hair, enhance eyes, etc.

As an example lets look at a 90 minute session to a real estate agent that includes 4 looks. I see a couple of ways to go with it:
1) I cull the photos down to the the best 20 or so and send them all without an additional retouching. Further retouching is an extra fee per image
2) I pick the best 4 or 5 from each look and they pick their favorite from which I'll do the full retouching work as part of the (higher) price package

What has worked best from a time and branding position for you in the group?

I'm figuring that if I do all the employees in an office as part of a group package, that rouching would be extra and the office gets all the shots but the bad ones.

One other question: licensing. I'm constantly dealing with this issue from builders and interior designers in my architecture business. My license for this kind of work is a set fee added as a line item in the overall costs. I've toyed with the idea of just raising my rates and including the license so I don't have to always deal with it.

How do you handle licensing in the headshot world? While the copyright principle remains, this seems like it would handled differently here.

Thanks all!