A:Answer 1) Yes, but the bay is a tight fit and finding HDD kits for the new drive are difficult to find. Fortunately there's an outfit here in Austin called Alinc that has the kits.
2) You could probably disable the driver for the touchscreen, not sure why you'd want to do this though.
3) Yes! I managed to get a dual boot system up and running with Win 7 Ult. You should consult the HP help forum before doing this. There are a number of BIOS settings that need adjusting. The setting that was causing me problems was turning the (USB 3.0 ports to Auto) otherwise the Win 7 install kept hanging.