1. As answered above, need a hardware flasher or have someone downgrade it for you for a fee.
2. Most use multiman to play backups from internal/external hdd
3. Yes. No one knows for sure who Sony will ban just for being on CFW. A lot of users who play online/cheat etc have more likely chance of being banned. But anyone can be banned/warned just for being on CFW
4. The only sure way is too never connect to the internet. Block Sony through Router/and or never sign into PSN
5. Right now a dongle is the only way to play PS2 backups while on CFW. Compatibility is still best with B/C PS3.
6. It is as I said best for PS2 usage. Rogero 4.30 v2.05 and Rebug 4.30 are about the best CFW going and stable.
7. Yes using either Rogero 4.30 or Rebug 4.30.1 you can play latest games