Shmuly,
First, welcome to the forum. It's one thing to read it, quite another to join, open up and post. What I express here are only the personal opinions of a lust addict in recovery, and the father of girls approaching shidduchim.
I know the feeling of arousal you describe in question 2. I can't say whether or not it's normal, because I'm not normal. We lust addicts are very easily aroused, and this arousal can start us on the path to z"l, although it doesn't have to. It is one of the great myths that once we become aroused we must finish the job. I'm not saying it's easy, but it's not a psik reisha.
Yes, it's important to find your bashert physically attractive. That doesn't mean you should be looking at her and thinking about what she looks like in the bedroom. I think it simply means you enjoy looking at her, that you think she's pretty. You don't have to be aroused by her to know she's the right one. Aderaba, if she's the right one, then, in the right time and place, you will be plenty aroused. On a shidduch date isn't the place.
My opinion is you should date when you are confident that you really have this behind you, because it will not go away just because you marry. In fact, it often gets much worse. 6 months clean is my estimate.
Provided the bochur is truly in recovery, I don't think it's helpful for a starry-eyed, idealistic Bais Yaakov girl to hear about her chosson's aveiros. She wants and needs to look up to you. But you do want it to be real. Some girls are getting savvy and asking about internet addiction and such. If you're faced with these questions, don't you want to be able to respond that you have been nichshol, but you can say with confidence that you've put it behind you, you've grown up?
Hatzlocha,
Alex