You need to have the "archery" skill to properly use the bow and this is obtained at level 15 (?) ish. After that point you can wield a bow properly. Bows juice your ability to dodge, but you relinquish your ability to parry and shield block. Later on you learn the "bait" skill which acts in a similar manner to feint and further increases your ability to avoid melee blows.

Bows are good for tanking in groups, but as Batman said, they don't do much damage. Their attacks are not able to be parried. In the beginning you will start with 1 attack per round, but this will increase to 2 attacks per round after a certain level.

You also have the ability to knock poison arrows (which give a chance to poison if the next attack lands and is not dodged by your enemy), or flaming arrows which exhibit the same mechanics but give a chance to immolate. Note: There are bows for Evil/Neutrals which attack with poisonous bite. These also increase your chance to poison.

You can shoot air shifters out of the sky with a bow. I've never had a chance to use this, however.

You can aim shots at various body parts with different effects. Some maladict, some lag and the damage and chance to hit varies.

2) I used bows in some situations (where I wanted to be more melee defensive) and other weapons in more offensive situations. Lag against mages is something of a problem with hunters and spell damage will be one of your weak points.

3) Yes. A major benefit to bows, particularly in the mid-ranks is their ability to help you tank better.

4) Can't help you here.

5) Yes it has been done before, In fact, I tried it also but it was just too niche. I cannot remember any major character with this build however.