Nope
The bottom is necessary, the top is only needed if you use the studio for animations and still renders like some other games here use.
If it stops extracting when you clear the error message, yes. If it keeps going, it's your extractor needing an update.
This game has been out of development for a while, there will not be any new story. As for the rest, mods might have added something, but mods are the only way this is getting anything.
Copy and paste UserData.
There is only FFM, you are the only guy in the game.
Not if you don't like what it already has, in that case, this just isn't the game for you.
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instead, it uses a torrent with only two files, one is only needed if you use the studio to make animations and still renders.