My quick take (profesional graphic designer):
1) Leave as an .AI file. MUCH more useful than a flattened PNG which is no longer a vector file. Vector files print better/safer. Ultimately, contact gameongrafix for final direction on this and what they prefer.
2) Probably OK to leave in layers. Probably not a problem either way, but if it were me, I'd keep them separate.
3) I would suggest you double click these layers in the layers palette and make them a "TEMPLATE" NON-Printing layer. You then would keep the layer but it does NOT print. The program stops the layer from printing but it still shows for other needed reasons. In addition, you can also name the layer something like "Controller Cuts_DO NOT PRINT".
4) Not sure how to answer this. Check with the vendor (gameongrafix). Typically a vendor prints EXACTLY the same size you set it up to be. If you need a "bleed" or in other words extra material in order to trim off the edge of your control panel for a more perfect fit, then set your file up for it, but I doubt highly that there will be any "shrinkage". Again, check with the printer.
I hope that helps. I haven't worked directly with gameongrafix, but I work with Illustrator/Photoshop everyday as a Creative Director.
