Just so you know, primus, your PC must be able to boot from USB - I have three laptops (Dell one-kilo machines with 1.7GHz Pentium-M and 1GB RAM) deployed which do not, even though this is the 21st Century.
Secundus, it will be slower. The USB interface is not even as fast as PATA, much less a 5400 rpm SATA drive.
Tertius, the USB drive is more fragile, both physically and electronically. Flash memory will fail, and experience shows it fails quicker than the hypothetical specification.
Quartius, as with SSD drives, heavy use leads to failure earlier. If you have adequate RAM in the PC, that's preferred for external Flash use.
All that being said, it should work well, until it fails, if it works at all. And, to be on point, here are explicit answers to the four questions you raised in your original post:
3: SEE ABOVE
4: ALL FEATURES WILL WORK IF YOU CREATE THE FLASH DRIVE WITH PERSISTANCE (which reserves R/W space so you can save files to it). As to how long it lasts until it fails, I don't have a good guess, but I have a booting USB flash drive which has been in twice-weekly use for 5 years, and it wasn't spendy, just a plastic-case 4GB run-of-the-mill flash drive.
And, a 16GB flash drive is more than adequate.