1. You can't at the moment. AmigaInput didn't get its bugs corrected in time for the last update, so it was pulled. It'll be supposedly be reintroduced in a BoingBag. It *might* work if you copy the files from an Update4 installation. Just use the Prefs tool to configure the buttons.
2. Not sure. I've never had Quake3 running well on OS4. Try falling back to the plain game (no mods). Unlike the original Quake, Quake 2 mods actually have to be compiled for the CPU architecture they're running on. Quake 3 is probably the same, and I highly doubt there's an AmigaPPC build of whatever you're trying to run.
3. It's hard, but doable. You need some free space to set up a main partition and a swap partition. Basically, the old existing install guide is valid up to the point where the installer asks you to "make system bootable". Instead, switch to another console and download a current kernel and modules from amiga.sourceforge.net. You'll also have to update your apt sources list to point to the current distribution. IntuitionBase has some more detailed guides on this subject.