You don't change the plug and play setting in Windows itself, but in the BIOS. Depending on your specific motherboard, there may be a line that reads "Plug And Play O/S (yes/no)" or something similar. I've found that somtimes I need to mark the line "Yes" while installing a hardware component and then I can change the line back to "No" after the hardware is installed.
From what you wrote about starting in safe mode and the keyboard still doesn't work, along with your firewall settings being lost makes me wonder if the keyboard is faulty and/or its software messed things up, or worse, that you've picked up a worm or other virus that's slowly wiping things out.
At this point, I'd try your friends old style PS/2 keyboard again, making sure the BIOS is set to use legacy devices, and then do a complete virus check. If there's no virus and you can manage to get things back to normal with the old keyboard, then you can try downloading the lastest drivers from Logitech and then re-installing the G15 keyboard using the latest drivers. If you can get the computer to work with the old style keyboard, but not the G15, you probably have a bad keyboard.
You might try using "System Restore" to go back to a period of time before the present troubles started. But I see you wrote that you tried different restore points and it didn't help. So from what I see, either the G15 is bad, you have picked up a virus, or the OS has become badly corrupted, in which case you may be stuck for a total system re-install. Yeah, that's maddening and time consuming, but sometimes it just has to be done.