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Answers:
I would suggest for to get the whole bathroom done. the labour price for complete bathroom is between 2500 to 3000 that includes all the plumbing work checked plastered if needed tilling 4walls and floor and fitting
I would say no don't wallpaper over old one you more likely to have bubbles won't be able to give a good finishing
Paint in the bathroom doesnt last long it will come off with the steam after few months i would suggest filling but if you don't have enough budget bathroom paint will do the job
More then reasonable if they do a perfect job, i would say it's little expensive to be honest
Check before you demolish anything wether its stud wall or any wall always check from the top