1 It does not flow constantly like a river. Water can fall, but it does not really work for waterfalls as the water would just drain and no more falling.
2 It depends on the block. A solid block would remove the water. Other blocks would sit in the water.
3 No changes have yet to be done to water rendering, just the simulation. Rendering will probably not be that different.
4 Not that I know of.
5 We have talked about sharks, but not really seriously.
6 Hard to compare, as the old water sim was heavily throttled, so it did not really work well and some of the bugs it had may be from that. The new water will actually do stuff, so you could say performance will be worse than broken gimped water. In any event, it is being designed to not be a resource hog and work within reasonable limits.