1. Yes they're often for pinball, it works, but it's not as...authetic...as one could wish.
2. There's a number of ways you could map the buttons such that a player could use either set, both through software or hardware, but tbh it's kinda pointless unless you're going for lefty-friendly. But yes, it can be done.
Honestly though, if you *really* want 4 players without building a behemoth panel, build two little ones and wire the controls in the second one to players 3 & 4.
3. Yes, you can consolidate it down. There's a couple games where it matters though, Gauntlet cares about where the coin was inserted. So does Rampage IIRC. There may be others. So be aware, if you consolidate it, you're either going to be using the keyboard or a few games aren't going to be kind to you.
OOps! Almost forgot...Hi! Welcome!