I haven't done this mod yet, but I plan to this spring as I need to get rid of my stock air box to get front shocks back on my YJ. Here is my answers to your questions, as I see them and plan on doing.
1) If you wheel were you need a full blown snorkle get one, most people don't
2) This is a concern if your hitting deep water, but if you drop in slow it won't be an issue, and I plan to space the cowl vent up a 1/2 inch to make sure this isn't an issue. Also plan to add one of the vent covers they sell that works like a mini ram air effect.
3) I've heard of the cowl drian plugging, and read a long time ago that if you slit the flat section of the drian tube up the creased sides, it will prevent it from clogging, other option is to just check the drain hose once in a while and make sure it is open.
I'll let you know how it works when I get it done.