1. California... at least
sounds pretty and feminine. It's yet another tryndee place name, but at least it has that. And California flows well with
Leanne as a middle name. It has that too. Yep.
Do not let her name the baby
Kali, though: that's the usual English name of a fearsome, dark, and violent Hindu goddess of annihilation (although she has other, more positive aspects too):
http://en.wikipedia.org/wiki/K%C4%81l%C4%AB. Encourage the spellings
Callie or Cally. In fact, I would recommend staying away from all K spellings of the nickname, unless your cousin wants to go full tryndee and misspell the kid's name as Kalifornia.
How about suggesting
Calla,
Calanthe,
Calista /
Callista,
Callisto,
Calixta,
Calliope, or even
Calypso? All at least real names for people, rather than places.
2. I say
Cassia KAS-ee-a (and, by the same token,
Cassius KAS-ee-us), and I suspect a lot of other people do too. But I wouldn't recommend tinkering with the spelling to clarify your preferred pronunciation, as a misspelled name just adds confusion and hardship to a kid's life imo. In particular, don't use Kasha, which would be like naming your kid Oatmeal, Grits, or Cream Of Wheat:
http://en.wikipedia.org/wiki/Kasha.