Medals, and why you want them

[Sundance]

If I were a traitor clown I would demand HOS give me as many dunce bands as possible in exchange for the sanity of the crew.

fix'd that for you. You could go around sticking dunce bands to peoples clothing and there's nothing they can do to remove it.
Also the dunce band is a reference to:

We should also allow sec/command to give out custom medals as well.

The purpose behind the medals is that they're pretty non-descript. They'll have a title sure, but you can award them at your leisure.
i.e: The ranked insignia could be given to whichever botanist grows the dankest weed, 1st prize wins 3rd rank insignia, 2nd prize winds 2nd rank, etc. The medal of honor could given to the winner of a boxing championship, the space operations badge could be given as a throw-in with the lazer gun in the armory to people who want to go fight drones, the bastard cross could be used to signify bad intentions (i.e: Mindslaved security, or some traitor RP'ing an insane vet)
Worlds your oyster.