1.) You only buff the scratch, not the entire panel. May need to resort to sanding if the scratch is deep. But if your paint is damaged, you're going to need a fresh paint job
2.) Wax does NOT remove hazing. You need to polish the haze
3.) Polishing/buffing will only make your paint look cleaner & newer if done properly. However, you're right about clear coat getting thinner.
4.) Depends on the condition of your clear coat/paint
5.) Wax does NOT make the paint look shiny. Sole purpose of wax is to protect the paint. Buffing/polishing makes the car shiny.
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