No, a cannon cannot shoot over woods or hills, even if it is on a hill. However, a stone thrower can if it chooses to fire indirectly.

Not unless that cannon is on a hill and the unit is not. However, as above, a stone thrower can if it chooses to fire indirectly.

No. Page 143 of the rulebook makes it clear that, except in rare cases, units cannot shoot enemy units that are engaged in combat. In the case of cannon, this means the target point cannot be placed in such a way as to risk the cannonball hitting a friendly unit, or an enemy unit engaged in combat with a friendly unit.

No. Because a war machine and its crew are treated as a single model, you must use the crew's BS.