1 - Actually they have increased it. There used to only be 25 slots. They upped it by 10 in SB. Agree that it should be even bigger though, especially for rings.

2 - Terrible coding, probably. The inventory code in this game is mindbogglingly bad.

3 - That would be nice.

4 - Again, probably terrible coding and some insanity with the way instance servers work. Probably the same reason you can't open FC menus while in a duty.