1- Not necessarily. You cannot deal in C&R rifles; you cannot sell solely to make a profit. You can sell it for more than you paid so long as your intent is to use the money earned to enhance your collection.
You need to maintain acquisition and disposition records (bound book) like a standard FFL. Yes, you need a real bound book. Your information packet from the ATF will detail what you need to record. Document the dates of acquisition/disposition, the buyer's/seller's full name, DOB, address, license number (or driver's license number for a non-C&R holder), the firearm name, manufacturer and/or importer, caliber, action, firearm type and possibly other items I'm forgetting. You do not need to document the firearm if it is already a part of your collection unless you dispose of it while a C&R holder.
2- Yes, but you need to record disposition. Keep your records timely; the ATF is known to check up on the records of C&R holders!
3- if you let your license expire you can no longer engage in the interstate commerce privileges granted by your C&R- you're back to being a regular gun owner. However, your records are no longer needed, the ATF doesn't want them and you can destroy them should you let your license expire.

Be prepared to be broke all the time or at least for the first year or two.
If you have a significant other, it may place a strain on the relationship as you'll be more devoted to what you just got and what you're going to get next.
In about six months into it you'll be on a first name basis with the UPS driver in your area, sadly You may be sued by him for injury's sustained while delivering shit-tons of surplus ammo.
Century Arms, Samco Global, Aim Surplus, and a host of others will need to be bookmarked under favorites.
Brownells, Midway, and a good many quasi-wholesalers will give you a discount if you send them a copy of your FFL.
You're NOT a "dealer" you can play the game of buying-selling-trading, but it's for collecting, not making a living:
Ordering (5) 91/30's from Century then selecting the ones you want to keep then selling the rest to friends, other collectors, or on the EE where they'll go to another FFL for disposition is OK, but ordering five and putting an ad in the Paper offering them for sale isn't going to fly.
You can't get handguns in NY on your C&R: most Wholesalers won't send them to you, and by State law they have to go through a Dealer in Handguns (01 licenses)
Of course your mileage may vary.

Oh, and Thirsty is absolutly right on all accounts.

A dealer needs to do that,but not a collector.

I've got an SKS, still trying to decide what to do with it (as far as restoration is concerned). :)