1. Not really. I envision Rubble as a tool for assembling raws, with auto-updating addon packs as a minor side benefit. Launching other utilities is not part of my plans. Basically, Rubble is there to build your perfect set of raws, after that it is up to the user to play the game with whatever other tools and launchers they want. This is also one of the reasons why Rubble addons and addon support APIs go so far to keep changes inside the raw directory. That way you can move a save generated by Rubble without needing to have Rubble installed on the computer you want to play it on (being able to have multiple saves with radically different raws in a single copy of DF is another benefit).
I encourage modders who want to provide a Rubble version of their mod to make the Rubble version first, then use Rubble to generate the vanilla version. For example Dirst's
The Earth Strikes Back! mod is made this way. There is a special addon I wrote for him that generates the Rubble version and dumps it in a directory ready to zip up and ship. The main reason to do things this way is that Rubble raws are much, much shorter than vanilla raws, and repeat themselves much less. So Rubble is also a modding tool, not just a mod installer. Even if you don't want to make your users use Rubble, you can still get many of the benefits of templated raws.
Either way, serving as a launcher doesn't enter into my planning at all.
2. Easy, so easy that I already wrote one... "Dev/SO Insert" adds templates to existing raws and dumps the result in a directory. You still need to do some manual tweaking and cleanup, but not much. Tilesets use a different system that is even simpler (check out the tutorials that ship with Rubble).
3. I used "Dev/SO Insert" to generate the original "Base" addon. Since then I have edited in changes with each new version, but if a file has lots of new stuff I'll generate it fresh. Keep in mind, "Dev/SO Insert" is a tool to help with porting existing raws. It's output should not be used without manual cleanup.
4. Not presently. The problem with this is that mod-merging is non-trivial. Also, I feel that Rubble's primary benefit is the way it integrates addons, non-Rubble mods would not be integrated in the same way, and so they would be fragile and prone to creating bugs. For example: What if dwarves are not the playable race? Most Rubble addons will "Just Work
(TM)", but non-Rubble mods will probably cause problems instead. If you really must do this, then use Rubble to generate the base raws, and use another tool to merge changes on top of that.
5. "other/src" in the download should have all the source code that is not online somewhere. I finally have internet at home, so I'll probably have a proper repository setup sooner or later (sooner).
I really, really need to get off my butt and update the addons for the latest DF.