PVE multiboxer new to server

Hiya!

I'm looking to make a multibox team to do some dungeons and raids on the Onyxia realm. I saw in the official post that the open world limit was capped at 5 accounts, but we may still bring more characters into raids, up to 40, which sounds awesome! It leaves me with just a few more questions:
1) Are we allowed to log in more than 5 characters while in a sanctuary such as Dalaran, or while PVE-mode in cities? Mainly for trade and enchanting purposes.
2) What can I do if I get an "encounter in progress" and the game just revives my entire gang outside the instance? Surely I can't get banned if I don't kill anyone?
3) Are we allowed to play together with other players, for example join RDF with a 4/5 group and pick up a random?

I appreciate all info :D

1) No
2) Log them out and get back to the instance in packs of 5
3) Yes