1) Depends on the publishing method used. Server Advanced is required for instant web publishing. If you set up one of the custom web publishing methods, you only need Server.
2) If you give each user a different account/password, security settings can be used to limit what records they can access in your database. See "Editing record access privileges" in FileMaker Help and check out this particular sub section: "Entering a formula for limiting access on a record-by-record basis" for a detailed description of how to set this up.
3) don't know, a lot depends on what each user will do when they are accessing the database.
4) Not a problem, but you may want to research some of the companies that offer FileMaker Hosting services. They may be able to resolve many of the technical challenges for you and save you the need to purchase a copy of FileMaker Server Advanced (You'd rent the use of theirs instead.)