My original reply applies to #1 and #2 without modification.
As for question #3, you are correct that for a taxable rollover funds from the traditional 401(k) directly to a Roth IRA, Form 8606 is not involved and has no effect on the calculation taxable amount of the traditional IRA to Roth IRA conversion. For a direct rollover from a traditional 401(k) to a Roth IRA, make sure that the 401(k) plan understands that the destination account is a Roth IRA so that they show the correct taxable amount in box 2a of the Form 1099-R.
