1. Probably permitted. We won't hesitate to shut you down if we get complaints though.
2. Read the host site before asking: http://www.heliohost.org/home/features-mai...riptingmenu/php
I misunderstood. I thought you mean something along the lines of a MMORPG. For what you would like to do, learn php and MySQL. php has file writing functions on its own, but php + MySQL is a lot less hassle than php + files on the server. http://www.redhotpawn.com/ is an example of this.
Sure, but what's the function of your site? Some sort of chatroom right? There is probably software out there for what you want to do, so that you won't have to code it. So I ask you again, what's the function of your site?
Your account is still probably in the queue. Activation is backed up right now, but it should resolve on its own within the week. In the meanwhile, have you set your nameservers?