1. If you tick the box in preferences that lets iTunes copy all your music to its own folder, it will do so, but it won’t delete it from where it is. I like to do this because it means anything I add to iTunes is copied into one place, wherever it comes from, so I can back up that one folder (iTunes Music) and know all my music is safe.
2. Answered above
3. My opinion: Forget doing that – tag it in iTunes and never worry about how iTunes has it organised internally. As iTunes playlists (and “smart playlists”) are all viewable in all DJ software, that is your new organisation system. In short, trust iTunes – it’s better than doing ti manually in your own folders, for lots of reason