Hmm, I wouldn't know just by looking that there was anything "wrong" with your hair. It just looks like normal hair to me: Fine in texture, but fairly abundant.
It's probably true that you don't want to do any heavy layering, but I can't imagine why you couldn't just do some subtle shaping and face-framing. It's hard to get volume when your hair is so heavy at the ends, especially without product or a blowdryer (which seem harsh if your hair is fragile). Lightening it up, especially in the front around your face, would definitely help IMO.
As to whether it is wavy or straight: I would agree that it's straight. Very few people have truly pin straight hair, but that doesn't make it wavy or curly either. Besides the superficial differences, wavy and curly hair have a different textural quality than straight hair. Hard to explain but I totally get it now because I have experienced both types. When my hair was straight, it was oilier and had more weight to it, and it would dry as a unit. Now that it is wavy, it is much drier and the hairs tend to dry either individually or in clumps.
This was what my hair looked like the first day after I stopped blowdrying it straight (which I had been doing for years):
http://img.photobucket.com/alb.....ff9e75.jpg
That picture is what gave me my first hint that my hair was not straight. Compared to mine, yours is much sleeker. There's just a gentle bend to it which I think is normal for straight hair. The only thing that could get it straighter is a flat iron.