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1. No you don't need an M3 cluster necessarily, but the 1 series smaller display I believe can't fit the large indicators and shiftlogic meter. A regular 3 series would work.
2. In my experience it seems that there isn't a differentiation between "normal" and "sport" anymore so I just always have burbles. But I set them to 3k+ so it's easy to stay away if I want.
3. I never did get that figured out. So far it hasn't been an issue in any case, just a noticeable difference in the little over-rev vs immediately slowing back down.
4. Yes, but it is automatically activated when the car is shut off. There is no longer a button to control it. Although I did toy with the idea of adding one. I just use my parking brake anyways. I often leave it running in neutral to run in and grab snacks