Based on my experience:
1. Yes
2. Don't know, but the final product is built with Xcode, so they should not have an issue based on that
3. They will do performance tests, but they never see the actual code. Your app will have to behave based on their standards (and I cannot find the page right now, but they'll point you to it when you sign up.)
4.a. You need to sign up as an iOS developer with Apple ($99/year)
4.b. Have a Mac and install Xcode (TGC is updating the guide for Xcode4, the current version, and I've posted my version of the Xcode4 guide elsewhere in this forum.
4.c. Look at what other people do in their offerings in the App store and model on that.
Cheers,
Ancient Lady