How do I modify this page template to show subpage excerpts (not post excerpts)?

by

Slightly modify these lines

$content = $page->post_content;
if ( ! $content ) // Check for empty page
    continue;

$content = apply_filters( 'the_content', $content );

to

$content = $page->post_excerpt;
if ( ! $content ) // Check for empty excerpt content & fallback to full content
    $content = $page->post_content;
if ( ! $content ) // Check for empty page
    continue;

$content = apply_filters( 'the_excerpt', $content );

UPDATE:
for adding featured image use

<div class="image"><?php echo get_the_post_thumbnail($page->ID);?></div>

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