1) There is a menu made specifically for the MK 2/3 to do thinks like flash roms to the cart, flash roms to the unit, and run rom.
2) Yes if your using an sd card you can hold lots of games. Later versions of the menu may support multiple files being put on the flashcart, but as of now it doesn't.
3) If your using the menu you play games then no, you can run clean unpatched roms. If however you still want you can burn single gst patch roms neoflash style to the flashcart.
4) In my experience Neo Power Kit works best.