Regarding the flashback scene, I was always interpreting it as if Vito and Tom were planning a legitimate future for Michael, distanced from the family business and that he even didn't want that but wanted to simply do it all by himself without his family pulling any strings.
Thanks fellas.
As I and others have posted elsewhere, Vito's (and, thus, Tom's) definition of legitimate was different from the usual definition. Vito viewed politicians and police as a commodity: they could be bought and sold and, otherwise, used to advance the family's interests. That's how Vito viewed Michael's future: Governor Corleone; Senator Corleone, and how Michael in those positions could assist the Corleones.