1. Not always, but sometimes yes.
2. I suppose it depends on the energy (which is sometimes converted into
ectoplasm) amassed by the ghost.
3. After reviewing Tobin's Spirit guide in GB: video game it only goes to seven.
4. There are 3 readings: Green for environmental phenomenon ex: ectoplasm
Blue: For items with charge spiritual energy, and Red: For ghosts and spirits.
5. There are four: Split up, don't look into the trap, always retrieve your traps
and don't cross the streams.
I hope this helped.