Re: applying templates to all but ...

here you are testing against the string 'first-author'

<xsl:param name="sort-order" select="first-author" />

here you are defaulting the sort order to be the value of teh child
element <first-author>

It would be simpler and perhaps a bit more efficient to use

<xsl:apply-templates select="mods:namePart[@type='family' or not(@type)]"/>

<xsl:when test="position() = last() - 1"> and </xsl:when>

aren't our American friends going to want

<xsl:when test="position() = last() - 1">, and </xsl:when>

what encoding is this? Three bytes with octal 227 that's hex 97, in
latin1 that would be a non printing control point (Unicode x97 is
END OF GUARDED AREA
whatever that means)