I'm not sure about penalty and rewards. I don't think there are any.
Yes, you can end a stay over early. On the calendar you can end it by clicking the little trash can. It's the same as deleting other events/holidays.
As for Jesminder's baby, I assume it depends on how far into the pregnancy she is whether or not she'll go into labor during the stay over. I haven't had many stay overs, and never a pregnant sim stay over. I would assume she would just autonomously disappear, have the baby, and return back to your sim's place. As far as I can tell, sims usually live their normal lives during stay overs. They go to work, school, etc.