Most security-only updates have a low risk of interfering with with the user or causing instability. Most feature updates have a high risk of doing so.
(1) Although I think there should be some way of disabling even those, even if that way is hard to find and/or cumbersome to keep the regular users away.
Even the Server Core edition, which has a much smaller "surface area" needs reboots almost every month.
It's also good since you can't swap out the kernel without rebooting.
I assume Microsoft took the same approach, just replace everything offline then reboot into a fully up-to-date system without any chance of things in RAM still being outdated.
Yeah you can. Ksplice.com We got bought by Oracle so it's in their ecosystem but the technology exists.