1) Yes (note however that it is Rank bonus, not skill bonus (i.e. you have 5 ranks in Chi Defense and a total skill bonus of 40 (25 from ranks, +5 SD, +10 In), so with successful Chi Defense activation roll, you gain +35 (+25 from ranks, +10 base) to DB).
2) The character has to purchase ranks in the MA Style Weapon Kata (and this also requires him to have a prerequisite number of ranks in the appropriate MA skill), he does not also have to purchase more ranks in the weapon as well.
3) The way that it was written, the Acrobatics skill is used for the roll. Some folks have decided to use the lesser of the Acrobatics or the style skill (i.e. treating it like a prerequisite).
4) The book clearly states that it is "+20 to his strength bonus", which means to the total stat/racial bonus (i.e. what is added to skills).
5) Yes.
6) Martial Arts attacks by PCs (i.e. humans, elves, etc.) are normally a Small attack. MA attacks by Monks are a Medium attack (this is one of their professional abilities). In both cases, damage caps are ignored for the same reasons that they are ignored for weapons.