First I wanna say when someone has 5 questions about a basketball game that is 5 years old, you know it's a darn good game.
1. Your preference. I like to play my games (or watch CPU vs. CPU when I'm busy with something), but I've never coached a game before, so perhaps someone else can help you on that one.
2. Never coached before, so I don't know, but I assume you can't since, to my knowledge, you aren't able to switch to coach mode when you are playing Human Vs. CPU or CPU Vs. CPU.
3. In my experience, a season is at least 25 games not including your conference tournament and possible NCAA tourney games if you make it. Maybe a few more or less depending on your team and if you are customizing your schedule.
4. I have the PS3 version, so I can't recommend an Xbox 360 version of updated rosters based on experience, but I hear Raiderfan's rosters are held in high regard here on these forums. Peep the rosters section for more info.
5. They have been back up for me this week and I assume they are the same servers for both PS3 and Xbox 360 (since they both went down at the same time). You might wanna try again. If not, it should be back up soon.