As an experienced Godaddy user, i am going to try to answer your questions.
1) You can use Database Publishing Wizard for migrating development database to production, but my tests failed because of collation conflict. I'm going to publish a tutorial for this feature on my global blog soon.
2) It's not a recommended way to install, but its only the solution for migrating dev to production at godaddy.
3) I have been using Godaddy since 2 years to host multiple dnn instances and multiple domains, for myself and my clients. Once you learn how to deal with it, its not too hard to configure and its getting better with control panels. However, don't expect any 1 gram of support from Godaddy. They will probably blame dnn if something occurs on their side :(, these are the issues i have experienced, of course i had problems, but now i can troubleshoot my own issues without their help.
4) Godaddy is good for your economy if you can't afford to pay a lot for hosting. But if you are able to do it, go with PowerDNN, EasyCGI or something else.
Regards.