h'oooookay this has been awhile...
1. AFAIk, the battle scenes are in battle.lgp, though i could be wrong
2. I usually used biturn for everything but i was pretty old fashioned like that. So long as you can get the file out it doesnt matter. For putting it back in i believe the current thing is to use img2tex along with unLGP
3.photoshop is great.
4. blender is good for previewing your work in 3D, the uvs should remain (you can get the .objs out with biturn. just look up some tutorials on navigating a 3d view, and how to import meshes, and add textures
5. its mostly about painting and photosourcing, there are a plethora of sources, but something that comes to mind is http://www.poopinmymouth.com/
6. just get all yer textures, and one by one get them looking good @ 5x size. Once you have them in yer editor we can go into more detail of how you might approach a given texture.