1. 12 months before, so decide soon. Bookings can be made 11 months out, brokers allow you to register early to try and have a renter lined up.
2. you link tickets to your MDE account. And link the DVC reservation to your MDE account.
3. Exactly the same as a hotel room booked through Disney.
4. You lose flexibility. In other words you cannot cancel, change dates, change resorts etc. You must have travel insurance to have any hope of getting your money back. Also you won’t qualify for any discounts that Disney may offer, like “free dining” etc.