I'm glad you're not emo. Emo's suck. Secondly, I'm happy to see someone using proper grammar.
Okay, soo....
1) Yes, you're in luck! I have the Slim model, too, and it does everything the first PSP can do, now.
2) You need to run a custom firmware that will allow you to play all homebrew and all officially released games. It used to be back in the ol' days you could run multiple (like dualbooting a computer) or you could run a program called DevHook to run a more recent official firmware.
3) They usually do the trick. However, there are times when it won't help you. Those times are very rare. It's relatively safe to enable your PSP to run homebrew and install custom firmware. Once custom firmware is on your PSP, if you happen to brick your PSP, there's a recovery menu that you can usually still access by a button combo at start-up. There's many uses of it including unbricking your PSP.
4) Actually, the UMD is 1.6 GB and some are bigger than that. There's programs out there where you can move the information over to your Memory Stick and you can just go and play it. Other times, you need to hook your PSP up to your computer, drag the disk image over and move it to the memory card. These are pretty easy to do, but again, you'll need custom firmware to do it.
5) People really don't get the PSP for music and thusly, there are few programs out there for listening to music. I know there's supposed to be an official one coming out soon, or maybe it's an update, that allows the music visualizations and coverflow and crap to look prettier.
Here's my personal must-have list:
ChildBeGone
PSPTube
CSPSP
Stakker PSP
Box Head PSP Style
Tetriabetes (Tetris)
Anti-Tetris
Pipeline
QQManto
beaverzpsp
Geometry World
Sushi RUBIK
SNES9XTYL0.4.2mecm
VirtuaMUnstaz
Smarcyclem
PSP Filer
eLoader