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When you buy an ebook, it exists in your B&N account. You can download it, delete it, and re-download it as many times as you want. But B&N does not use the word "delete" when talking about deleting the book from your device; they call it archiving the book (deleting it from your device) or un-archiving the book (re-downloading it).
1. Yes, if you use up all that space, you'll need to archive (i.e. delete) some old books to make room for new ones. But don't worry, they're still in your account.
2. You don't need to back them up; B&N does it for you. If you lose them, just re-download them.
3. I doubt it, but I don't know for sure.
4. There's no need to, but I think you'd probably have to root your device to get those files.
5. Yes, that's possible. No, there's no limit.
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