2. Yes, it is working but the image size you have chosen is too large for your theme. You need to decrease the image sizes.
3. It is working for me however not all merchants provide large versions of their product images.
Regarding WooCommerce, it's a completely separate product. You would need a subscription to our API however you would not need your current Factory subscription. Basically, it's not an additional cost, you choose one or the other (Factory or WooCommerce).