Welcome Verzus,
1. Of course its possible. There are games like metas "ghost in the sheet" or kazs "rhiannon" which are made in this style.
2. Yes, but you have to code it all by yourself
3. The WME video format is theora. Theora clips are easy to integrate.
4. Yes, a window (like the main menu or the quit dialogue) is the best solution for this.
5. I'm not familiar with this games, but I'm sure its possible.
6. WME is very powerful and gives you many opportunities, many more than other engines. For this plus on features you have to code. WME isn't a click & play editor! The WME tools take much work from you, for example window edit writes the window definition files for you and scene edit the scene definition... But there is no tool which code the whole game for you! If you want to learn WME the tutorial in the documentation is a good starting point, also reading metas WME-book will be of much use to you. The WME-Wiki and forums provide many useful information too. All this sources together are more than enough information to make a game.
7. That depends on your pretension. Making graphics and including sounds and puzzles and so on... eats a lot of time. I couldn't guaranty that it's enough for you.
Take a look at metas book
http://res.dead-code.org/doku.php/wmebook:start it will help you a lot for your decision. Also there are some source codes of games and game-snippets at the forums. Download some and look around it. It was always a great help for me to see how others have done their games.
Generally a basic knowledge of C or Java or another programming language helps a lot, but it isn't necessary.
If you choose WME you can also rely that you find help on the forums.
Cheers, maze