1: You are headed in the right direction with sealing leaks. I'll bet you have a thin chrome coated rack for your charcoal. That needs to be replaced. Use your charcoal rack as a template and make or have made a charcoal rack from 3/*2-1/2" concrete rebar. A charcoal basket can also be used. That thin chrome rack will bend under the heat. It will sag down onto the ash which will stop air flow. No air flow, no cook. Last tip is go buy a cheap garden trowel. Knock the wooden handle off and weld a 2-2 1/2' piece of that rebar to the shovel. Now you can gently scoop out the ash without them blowing all over your meat and you won't burn your hands.
2: The grate on the firebox is for grilling steaks and such. HOT fire, 2-3 minutes a side and job done. Also good for the chimney.
3: Water pan; in my opinion, nope.
4: Easy solution; just sprinkle the chips over the hot coals. Handful at a time. When using charcoal; been doing it that way for years. Nothing fancy. Mix your chips and add a handful as you think needed.
Don't stress or over think this. It ain't rocket science. You will be fine.
Make fire, throw on meat, add chips for smoke. When done; remove meat. DONE! Caveman stuff works!
Of course things can get more complicated but just start with the easy stuff first. Relax and have fun.