Answers:
1) Yes
2) Yes and No. Grub depending on menu.lst. If menu.lst is deleted, grub won't be able to boot.
Lilo also depends on lilo.conf, but once you update lilo you don't need lilo.conf. You just can't change anything without lilo.conf.
3) Yes and No.
Yes if you do not allow other distro to install Grub/Lilo.
No if (2)
You can just allow other distro to overwrite the mbr and create new Grub/Lilo. Then you edit your Grub/Lilo using your last distro that modified that grub/lilo/mbr.
4)The last time I used, it was Lilo. I believe you have an option to choose.
5)a)Yes, because winme is a the most unstable Os in it's class.
b)I would suggest XP rather than W2k considering the hardwares and softwares support(for family).
6) fdisk /mbr =dos--->winme
fixmbr = xp