I have an 02 Legacy with a 2.5L, so it's not quite the same car, but
here's my $.02...

1-If it can be done in the car, but difficult, that probably means
exactly that.  However, Haynes manuals are notoriously bad for this -
don't be surprised if halfway through you conclude it would have been
easier to just pull the engine.  Looking at my Legacy, it definitely
looks like a PITA to pull the heads off without lifting the motor.
Probably have to remove the front tires for access, and must be fun
torquing the heads back on.

2-If it's like my other cars, there's two engine mounts (one each side)
and the transmission mount is the "third" engine mount, so once you
remove the engine mounts the engine/tranny "pivots" a bit for clearance.
 that said, I'm a Subaru "virgin" (see my other posts...)

3-Unless you feel like draining and refilling the AC, you don't want to
remove the compressor.

4-Yes, you can do that.  However, if something does get bumped, how do
you know if it's all lined up correctly anymore?  If this is the first
time you're going that deep in an engine, line it up.  You don't want to
do it twice and bend the valves if you get it off 180 degrees.

5-I honestly don't know this one.  However, I would guess driver's front
is #1.  Or whichever head is further forward.  And IIRC mine's marked on
the top where the ignition coil is which cylinder is which, so follow
the plug wire.  If a 96 still uses a regular distributor with timing
marks, you can do it that way.

6-never heard of that, but I'm just a backyard mechanic.  But... my 2.5
does call for a valvetrain adjustment, and while you're in there...

Go slow, make notes, take pictures, label and bag stuff.  It's not a
race.  And honestly, looking under the hood of my 02... I'd seriously
consider just pulling the motor if you're doing all that, would make it
WAY easier.  But I've yet to pull a Subaru motor, so I could be insane. :)

Ray