I'm going to repeat the title in a longer word. Can a 32 bit Ubuntu address more than 4 gb of RAM on a 64 bit processor?
You need to use the PAE Linux kernel. The installer should be able to select the PAE kernel for you. Make sure that when you install, there is Internet connectivity, so that you get the PAE kernel from the start. If in doubt, you can install using the DVD ISO of Ubuntu (which definitely has the PAE kernel). For more on PAE, see Enabling PAE.
Yes it can. I am running exactly the configuration you are asking for without any problems. Obviously you need to use the PAE kernel.
However, you should think about if it is better to run the 64bit kernel since it allows to use the CPU more effectively. It depends on what you are intent to do with the computer if a 32bit kernel or a 64bit kernel is more efficient.
For what i have learn, if you install the 32Bit Ubuntu on a PC that has more than 4GB or Ram it will automatically switch to PAE Mode so it can use the additional memory. There is no need to enable it since it does it automatically when it sees you have more than 4GB of ram.
For the performance of using PAE do not worry about it since the difference between it and the normal 32bit is less than 2% when using the memory above the 4GB. When using the memory in the 4GB range it will be the same performance.
With PAE you can do something like that, but this causes compatibility problems for some software.
Unless something doesn't work for you after you've tried it out. It's better to just use 64-bit!
you can run 32 bit applications on a 64 bit system with the ia32-libs.
Finding out if you have them from a terminal:
dpkg -l|grep ia32-libs
and for installing type in:
sudo apt-get install ia32-libs
I urge you to use 64-bit.