I think they found out it was the last season late in the day, because you can tell some plotlines were being set in place, like Kevin using one of Smokey's sabotaged rubbers on his jewess and Sue finally finding her get rich quick scheme as a teacher to the stoned out accidental parents of the 70s. I guess they decided there had been enough evil and to just give the Murphys the slightly happy ending we wanted to see.
Vic believed in Sue and her teachings, so I'm sure he embraced it all and became father of the year, although part of me kept waiting for the kid to do something that was reminiscent of Kevin, given that he tapped that blonde bimbo as well. As for bonding with Frank, you can see Frank start to very slowly warm to Vic all through the series, so I think it's safe to say they became good friends once Vic was completely sober and started being more responsible... and Frank decided to lighten up a bit. It's all head-canon, but I think it's a reasonable assumption, given where both of them were in the finale.
On a personal note, I've been caring for elderly parents who are still mostly with it, but are having bad days where all sorts of crazy crap can happen. Frank's desperate search for (and understanding of) "Box 16" was oddly comforting considering what I was going through the week I watched it. I felt like someone understood what I was going through with my own parents.