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If you agreed upfront to pay $1000 in medical bills than I would continue to pay whatever bills she send (related to the birth) until you reach that max amount. Once your commitment is complete I'd send her a copy of all the medical expenses you have paid this far and let her (and your lawyer or agency) know that you have fulfilled your agreement and she/they will have to find some way to pay whatever is left over. Yes, she should have given you the bills much sooner before they reached collections and she shouldn't have waited this long. Unless you stated a certian time frame ahead of time, I still believe you are morally and financially responsible for the amount you originally agreed to.
Open adoption can be difficult. It's important to set appropriate boundaries and it sounds like that is what your trying to do. She has a right to feel however she does about adoption and her feelings will likely change over time. It's up to you to decide what is and isn't appropriate to say, or when it might be appropriate to give him those kinds of letters.
Try and think of it as if you were the child. I know for me, I would want to hear my birthmoms true feelings of how she feels, not a sugar coated or fake version of it. That may not be appropriate for me to see as a young child or teen but as an adult it could be very appropriate.
Think of the long term commitment your making for your child. As long as the direct contact with the child can be positive for the child and create a good experience. Any letters that may be more difficult for a child to understand could be saved for later. That's something you can discuss with her or you may even suggest that rather than send him those messages now, she keep a journal just for him of what ever feelings she's having along the way and that could be somehting she can share with him when he is mature and able to understand adult situations and feelings.
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