I have a couple tutorials on what all you can do with the portfolio template here – http://appfinite.com/tutorials/
The answer is pretty much yes to all of your questions except 4 and 5. I try to follow WordPress best practices when coding, and it’s best to separate Portfolios from the theme and place them in their own plugin. What we have now is pretty basic, since that’s what was intended. It’s pretty much just a Blog that is setup in a portfolio style format, which shows Featured Images (the image thumbnails you see). If you’re looking for more options, I always recommend to search for a better Portfolio plugin that is designed to do all of the things you need, because this template is pretty basic….it’s just something to get you started.