1. Depends on what you're doing and which sword you have as a human. With brute force on one enemy (with Light Sword), human. Easy kill on a bunch of enemies (with enough space), wolf. So on and so forth.
2. It explains that the people of the Light realm have Shadowy counterparts. The two join in Twilight as the Twili. Or something like that.
3. I'd say blue, but why does it matter? It's a panultimate sword either way. (PAN, not PEN, remember.)
4. She never takes it off, so you don't know what she looks like without it. It's just an easy way to keep an eye on the first Fused Shadow (XD). Oh, but when she gets purified (when you beat the big boss at the end), it's no longer on her, and well, I won't sugarcoat it--she's hot!