In real world use, shields are parrying weapons (very effective ones) but can certainly be used as cover against missiles. Bullets and beams, not so much, but I'd rather have one of those happen to hit my shield than my arm or torso. But you pretty much have to be aware of the attack and actively position yourself.
The CRB rules are reasonable; shields get a +1 to parry, and the two weapon use rule only penalises attacking with both weapons - not attacking with one and using the other to parry with. Sword and Board works.
As far as using a shield as cover... the p77 text is this:
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It doesn't say a Shield is cover as such... but I would certainly allow a shield to be used as cover in many situations. Assuming it's made of materials that can cope with whatever the ranged attack is, you can definitely cower behind it if your exposed profile is small enough.
As far as combining a shield and a Combat arm, I see no problem there. The shield provides a bonus to the Parry as usual, so the combat arm's parry bonus is one better (+3 for a basic one),
providing protection against attacks it is used to parry (+2 protection for a basic one).
(Edit: I didn't read far enough on p.77. Yeah, the protection bonus is only when actively using it as cover and not engaging in combat (which is only the -2 to be hit thing). Sorry about that!)
As an extension of the existing rules, I would allow a Shield to parry low velocity missiles, definitely thrown objects that the defender is aware of. But maybe the -2 to be hit is enough there?