1. I've not played online but 16 is the maximum ammount of cars on track.
2. Depends in what areas, the driving simulation part of it ranges from being as good as those above, to being not even close. You can setup you car with downforce levels and supersoft tyres to make them have insane ammounts of grip that would never happen in real life. Though if you can resist going over the top the physics are great. Many of the road cars as stock are fantastic physics wise, and for power oversteering/drifting the tyre model doesnt have a heart attack (like it can do in the above sims) when you try to do it and in my opinion is the best at that by a mile.
But if you're an iRacing/NetKar nut, you're going to be used to those sims so GT5 will be different, in many aspects the driving sim isnt up there with those, especially FFB is different (feels more like driving a power assisted car with a heavy wheel, which isnt unrealistic in the feedback area but it is harder to feel the car, in my opinion its not near as good). Mechanical damage is only available in online races, cosmetic damage is available all round, i'm not sure how it unlocks tho. I've seen cars hit a wall at 150mph and barely a scratch, then ive seen a slight bumper rub cause more damage.
Race wise, this is not a race sim, you dont turn up at a weekend for some practice and qualifying runs before the race, there are no flag rules, no safety cars, this is the world of gran turismo and not the real world in the sense of the race events. You enter an event (early races are 2-3 laps long, later races will get longer depending on the track length) and you will start 1 place behind the middle of the pack, so in a 12 car race you will start 7th.
3. Full transmission settings apparently unlock at a higher level, they have the option there to do it but they are greyed out, even at lvl25 which is a considerable way through the game, instead you get to adjust only the final ratio with an estimated top speed, i'm guessing the full freedom is available later, or will be patched in. Suspension settings are all there but you cannot specify different settings for left/right, LSD settings are available to tweak, and the downforce levels can be adjusted (on race cars, road is very limited). You can upgrade almost every car, new parts can be fitted for more power or better handling etc, if you have played the old games its much the same.
