2. With NSMB update you'd get plain IOS60 v6174, you can always patch it later if you need to.
3. No password, it's an option in priiloader, which they'd need to know how to access.
4. Priiloader can do that through one of it's options.
5. Yes you can. HBC will default to SD first, remove SD and it'll check USB.
6. They'll be extracted as full size iso. They may still be compressible using winrar, if not use Wiiscrubber and then compress. Provided the main data is intact it'll still work on your WBFS volume.
7. Yes but it involves buying an expensive, no longer manufactured, LG DVD ROM. USB Loaders are the best way to rip.
8. Yes, just change the option. You can do it through the loader or on your PC by editing the config file.