1, sapwood
2, edge or bias grain are the best but I've used flat grain also.
3, some runoff is ok as long as it isn't too steep.
4, I cut them at 3/8" and after dressing both sides they end up about 1/8" or slightly less.
5, knowing the stave you cut the strips from is sound should be good enough. If the stave was mishandled off the stump the backing strip could be compromised.
6. if the runoffs are not too steep the backing strip should be ok.