I've got a 2nd generation iPod Shuffle that I use on the walk to work, so I can answer these:

1. Yes.
2. Skip, skip, skip.
3. Yes.
4. Maybe not 12 hours, but I charge mine once a week or so. Hasn't run out in the middle of my walk to work yet.
5. No idea. They're so cheap, I'd just replace the iPod.