1 - You're correct, an A1200 with some Fast RAM (4MB or more) will make a perfectly adequate WHDLoad machine. If you use a games launcher such as Tinylauncher early in the startup-sequence to save RAM, you can have the machine boot straight into Tinylauncher. I did this on one of my machines years ago - but holding down the left mouse button upon booting skips Tinylauncher and loads Workbench - best of both worlds. Another machine I have with an 030 loads Tinylauncher after Workbench has booted (goes straight to Tinylauncher screen not Workbench) but when I quit it the Workbench is there ready to use. My serious machine boots into Workbench and I use iGame instead.
2 - They probably bought the clock port clock before the Fast RAM card.
3 - No, upgrading to 3.1 is a waste of time and money for your WHDLoad machine. If down the line you find yourself wanting a more powerful Amiga, then you can upgrade your RAM card with a CPU card and softkick 3.1.