1. Essentially yes, you just swap out some of the base extract for malt. If you have no idea of your efficiency, you can just take a guess at 75%, figure out how many points that will give you, and remove that much extract. When you're brewing, you can just add extract if your gravity is too low.
2. I'd recommend batch sparging - see dennybrew.com for a detailed explanation.
3. I don't know what you mean by "true color", but DME should make for a lighter beer than LME.
4. Yes, 60-90 minutes is the right amount of time to mash for good conversion. Iodine is next to useless, don't bother with it.
5. Not if you batch sparge.
6. If you have been doing full boils already, there is no need to adjust the amount of hops.