Sure I don't know all the answer since it's kinda technical stuff.
1. Yes , but it look worst than that of composite. so you better stick to composite for NES. S-video do look a lot better when use to output SNES.
2.I have some low res-picture that I took before I did the audio mod in my pc will post some when I find it.
4. No , the game will work but no expansion sound. I tried Madara , Crisis Force , Drakular 3 and Esperdream they all work but no extrachennel for audio only normal audio.
5. You can easy mod NES controller to work with Retro Duo, just have to swap few wire color.