Both units would make Morale tests to check to see if they can interpenetrate. Thus, I would guess correct for your second answer. The rules do not specify the type of cover provided by breastworks. I assume fortifications like Ticonderoga would be hard cover and a simple rail fence is soft. All breastworks are hard.
Rail fences are soft.
Yes, although it doesn t mean everyone s dead. It just means that the unit is no longer combat effective. I think that the 40mm x 40mm are more readily available. Artillery and command stands should be 40mm bases. Matt is correct however that as long as your bases are fairly consistent, it really doesn't matter.