Wow, that's a lotta log questions

- Error logs are useful if you are seeing errors. You can paste the results here to help get answers. Since I see you are still running 7.0.2 you are probably seeing errors

- there really is no recommendation that fits everyone, size would depend on how much room you have on the hard drive. I'd keep at least a month's worth tho.
- if you haven't used them so far purge anything older than a month, you can make a backup of them first if you like.
- paths are used
- you can store them anywhere, but it's best to put them where others can't access
- they are read from within ubb.threads, in the control panel
- yes