Seems fine to me?
Not simultaneously without buying a second license
Just make sure you remove it from the test domain when publishing it to the primary end location
It can be used as a sub domain but NOT as well as a primary domain also. 1 license = 1 website (both domain and subdomain count as individual websites)
Locking 2 year old thread to prevent confusion
No, but it will definitely damage your sales and result in constant requests if you do not have one
No they won’t they are PSD templates and a HTML file.
You need to choose from WordPress themes http://themeforest.net/category/wordpress
Fair enough – (unofficial response) as long as you make sure you have explicit permission from the authors you should be fine