A:AnswerNo, it cannot be installed in the manner you are suggesting I do not believe.
I have seen some people using an ARM version of Windows on these, but that is kind of sketchy. You should go into this with the expectation being to use MacOS entirely.
A:AnswerYou would have to buy Microsoft Office 365 Personal or other 365 plans. It’s best to buy it at the same time as the Macbook to get a discount on the 365 and extra months.
A:AnswerM2 with 16gb. The performance will be more than enough with either the M2 or M3 but the extra ram will keep it running smoother for far longer.