A: Yes the tablet will update to Lollipop. I bought mine in July and soon after I was able to download Android Lollipop.
Q: Does this tablet have the capability to run Microsoft Office?
A: Office FOR ANDROID, yes. I installed it with no issues.
A: As far as I am concerned, the color quality is excellent. It also has what is called Miravision color enhancement setting so you can adjust it to meet your own liking.
A: This particular model does not, but there is a version (not sold by Best Buy, I believe) that does. This point was almost a dealbreaker for me as well, but I just tether it to my cell phone when I need a mobile connection.
Q: Does the tablet mount sd cards properly yet?
A: I got the same tablet and Samsung 64GB micro sd card, you don't need a computer to format the card, just insert it in your tablet and go to your tablet settings, then look for storage and you will find the option format the card, you will find there the option to use your card as the default storage so everything you download will be in your SD card. P.S. : If this doesn't work must be something wrong with the tablet.
Q: Does it have Bluetooth, ( and if so, what version ),?
A: This tab comes with Bluetooth v 4.0.
Q: Is the touch screen alphabet like a typing keyboard?
A: Yes it is exactly like a typing keyboard
Q: Any issues with flash and Facebook usage?
A: I use Facebook on my Lenovo Tab 2 and watch videos without any problems.