I won't try to answer all your questions, sorry. It would be too long answer. Seems like you need to read a lot of stuff about game physics.
Shortly, if you have large number of online players you need to start thinking about server cluster and scaling. There're two main approaches:
Instances: you have multiple copies of your virtual world/map each handled by separate physical hardware with a hard limit of maximum number of players. Then you start reading about matchmaking.
"Shared universe": split your world to sectors each handled by separated physical hardware. Much more challenging to implement. Can support seamless world.
You can find tons of useful info on www.gamedev.net.