In effect, yes it would need to be incorporated into your new template (See the readme).
Absolutely should. (See the readme)
Anything that is/was generated by IH will not be lost, now if your "custom template" does something special outside of what IH handles/provides then that is outside the scope of this thread. But again, see the readme.
I would advise that you test your new template on a "offline" store before making the change. Don't want to lose business because of something that might be wrong in your new template. I will say it is somewhat exciting to make a switch like that and see that it works, while being concerned that it might not. A sort of stage fright.
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