What Richard_Kennaway said... and I would add (from experience):
1. Journal often have guides for authors, e.g. introduction, method, results, discussion sections - I have always ignored them. And even when they rejected the manuscript, the editor/referee never mentioned that particular element.
2. Yes and no. The additional work is simply annoying: filling forms, writing cover letters, arguing with the referees, typesetting, reading proofs. Or simply putting into words and sentences the images and symbols in your head. It seems like a lot of work, because it is outside of science, but I would definitely say that most work goes into the research itself.
3. I only worked in smaller groups (4 or less), but never had this problem. Most of the time the order was alphabetical exactly to preempt this, and department heads etc. were never included. The awkward feeling was there, when someone had to say "Alphabetical?", even though that's what everybody wanted. In some exceptional cases (thesis), a particular person was first, and others alphabetical.
4. The usual practice is to try for the ,,best'' possible journal in the given context, and if the paper is rejected, go to the second best etc. So one at a time, but you can try as many as you want.
X. Re: arXiv and prestige. Publishing/posting on arXiv does not give the same legitimacy as journals. And I know of cases, where before the manuscript gets published, other groups analyse the preprint, further the topic, and manage to publish first. Often it's a race to get the result registered under your name with the journal stamp seeming more official. Some are reluctant to disclose their results for that reason. To make things even more interesting, some referees insist that the manuscript must have an arXiv version first, so that it can be,,discussed in the community'' before it can even be submitted to a journal.
Finally, depending on the country, published articles count in career advancement (habilitation, tenure) while arXiv preprints might not. This is also where point 3. gets modified: sometimes it is necessary to obtain statements from co-authors regarding who did what, and the political negotiations rear their ugly head regardless of the published name order.