Welcome, Jason.
1. You could do that.
2. You could do that.
3. Don't know what your local stores might carry and we don't know where local might be as you've put no geographic location in your User Profile. Quikrete and Sackrete are common home center brands of such products.
If you'll visit the Shower Construction thread in our Liberry you'll find information in a couple places on how to made deck mud.
4. That would depend upon how big your bags are, eh?
5. No. You want to bond your mortar to the slab using a slurry of Portland cement or thinset mortar.
6. There will be no wire mesh.
7. You could do that. Some folks use a foam strip and just leave it in place. You really want a larger gap than that. A quarter-inch is good.
My opinion; worth price charged.