1. No, there are people that bot and most of the time they get banned.
2. Yes, chances are you will be caught and banned resulting in the termination of your character
3. Some people grind the hell out of this game, some shiny hunting, some item farming, some ev training, some leveling etc
4. Things will sell very quickly if there are a lot of people playing and looking at the gtl, and I do mean a lot
I can assure you the team in charge of catching botters/rule breakers are doing their best to keep the game fair for everyone, chances are they are probably swamped at times but they are always watching to try and catch rule breakers