First, the "flash" setting is the "mechnical shutter speed". Both curtains of the shutter will be open at that speed, 1/125th of a second, with the entire frame uncovered. At faster speeds, the entire frame will not be illuminated by the flash.

Now,

1. Most probably. I'm not familar with the flash duration of the 285, but usually they are considerably faster than 1/125 of a second. I could be wrong, but I cn't think of *any* single-flash units that burn that long. see Note 1

2. No. Unless I'm mistaken, the "1/2" and "1/4" POWER settings will be for a "manual" flash setting. The Vivitar 285 is a Thyristor unit - On "automatic" there is a small sensor that will read the amount of light and turn the flash off when a certain amount of light is reflected from the scene. On the "manual" settings, that sensor is bypassed and the 285 will produce 1/4 or 1/2 of the full power of the unit - requiring the old "guide number" calculation.
The camera is not "coupled" to the flash unit. If the highest film speed setting on the flash unit is 400, and you are going to use 1600, set the aperture two stops smaller. If the setting on the flash for ISO 400 is f/8, leave it there and set the camera aperture to f/16. You may run out of room here, depending on the smallest aperture available on the camera - then, about the only thing I could think of would be a 2x neutral density filter over the lens.

3. The attachment that goes over the flash tube is a "wide angle diffuser", that spreads the light from the unit for use wth wide angle lenses, and "softens" the light - while lowering the output somewhat.

4. There are one or two "tricks" to soften the light. One is to drape an ordinary handkerchief ove the flash tube, being careful NOT to cover the Thyistor sensor. You could also "bounce" - I think the flash tube on the 285 can be swiveled up through a 90 degree arc. Point it at the ceiling with a bounce angle of 45 degrees. That should scatter the light enough to minimize the harsh shadows associated with "straight-on" flash.

Note 1: For all the "Techies" out there - Yeh, I know of the Olympus "T" flash units... they are not "single flash" units - they are really "pulsed".