iPhone Upgrade Question about Trade-in Phone

I just upgraded my iPhone 13 Pro Max to the iPhone 15 Pro Max. I was eligible back in March of this year for the 14 Pro Max, but I waited until the fall and got the 15. Two questions:

When I took the case off to send the iPhone 13 back for the upgrade program; I did not know the back glass was cracked. Do I need to get this phone repaired under the AppleCare and then send it back?

Secondly, since I waited to get the 15, my loan balance on the 13 is only $300 - something dollars now. Can I just keep the phone; pay it off and then get it repaired under the AppleCare (as long as I don't cancel the AC on the 13)? The only reason Would keep it is to give the 13 to my dad who still has the 11 (geez).

Does it affect the upgrade program for the 15 in anyway? Am I penalized in anyway? Will I still be eligible for a new one next time? Just trying to way the pros and cons of all of this. I appreciate any advice!

Cheers!