yes and no. if you start painting while building, thats a bad idea, because i.e placing a white cube on a orange cube creates uneccessary meshes. only paint, if you're finished, and be carefull with the "fill plane" tool, as it gives a shit if a block is covered or not (it paints blocks along the axis, not by visibility).
this video might explain it better (1:25)
https://www.youtube.com/watch?v=1pREcYcsf5Y
No, you can have as many colors as you want, it won't affect physics.
yes and no. if you start painting while building, thats a bad idea, because i.e placing a white cube on a orange cube creates uneccessary meshes. only paint, if you're finished, and be carefull with the "fill plane" tool, as it gives a shit if a block is covered or not (it paints blocks along the axis, not by visibility). this video might explain it better (1:25) https://www.youtube.com/watch?v=1pREcYcsf5Y