Dear Ben,
Thank you very much for the thoughtful questions. You're asking a lot of the same questions that I am, as I pursue this research program. Here are some attempts at answers, based on my current thinking. (Numbers match to your questions.)
1) The key question is why the path integral works in the first place. If you have to sum first, and then square, then you're correct: one needs all the paths to be "real". But there's another way to "double" the paths so that you never need to square the sum (Sinha and Sorkin, 1991), in which case one can imagine that the universe is just choosing one of these possibilities (weighted appropriately), and the unchosen paths aren't "real". The problem with this, as noted in that paper, is that if one is taking the particle perspective, then some of those probability weights have to be negative, in order to get interference. BUT -- I currently think that a field-configuration-path view can solve this problem, especially if a similar "doubling" is used. (To see my arguments for fields vs. particles, you can try my previous essay in this series, "quantum theory without quantization".) This is actually my main research focus right now.
2) Feynman's approach does indeed take the Lagrangian that classically yields a real, second-order Euler-Lagrange equation, and (via the path integral) makes equivalent predictions to a complex, first-order Schrodinger equation. (Dropping one order is offset by the real->complex transition.) But I'm not interested in generating NSU-style equations... The question is how to quantize a classical Lagrangian (such as GR's) without ever making such a step in the first place. No, it's not known how to do this yet, and I don't know of anyone else who is really working on it. (I'm looking forward to reading your paper, and hope to get to it soon.)
3) The latter. I mean, look at how beautiful GR is, with a few brilliant principles guiding the whole thing. Then look at the conceptual mess of QM and QFT. Which is more likely to be on the right track, especially when it comes to spacetime? Sure, maybe GR is also incorrect at some level, but it seems to be to be closer to the ultimate truth than QM (again, especially when it comes to spacetime).
4) Well, in any unified theory along the lines that I envision, the metric would also be solved "all at once", along with any matter fields. So an external hypersurface boundary condition on a manifold would generate the structure of the spacetime within that boundary as an effect. Is this giving up traditional causality? Sure. But traditional causality is just another aspect of the NSU. (Also, see the recent piece on my work with Huw Price.)
Maybe one way to think about it is to make an analogy with a high-Q laser cavity that contains a standing-wave EM field. Flipping time and space, the analogy to the NSU view would be that the left mirror causes the field, and the nodes of the field then determine where the right mirror is allowed to be. (Sort of a left-to-right causal order.) The LSU view is that both mirrors determine the allowed modes of the field that can be inside the cavity. Extending the field to include the spacetime metric, this solution would also determine how far apart the mirrors were in the first place. The global solution might then still look like a "left-to-right causal" relationship, but it would be an illusion.
5) Yes, I like the continuum -- and here I'll again point you to my last essay, 'quantum theory without quantization'. If it's not still on the fqxi site, a copy is here. Is this anthropocentric? I don't see how, but maybe it's a blind spot of mine. (Furthermore, I don't like Planck scale arguments for discreteness, because those scales aren't Lorentz invariant. Doubly special relativity doesn't solve the problem, I don't think, without introducing bigger problems at macroscopic scales.)
As far as why we live in 4D, sure, I'd like to know that, but would be content with an ultimate theory that took that as a given. My guess is that once we found an ultimate theory, we could experiment with other dimensionalities and at least narrow down the coherent possibilities. But it seems tough to do that without a working ultimate theory.
Thanks again for some great questions!
Ken