I can't answer all your questions, but no matter what version of SH3 you're using you still need the 4-Gig patch to run the biggest mods, especially the Merchant Fleet Mod.
If Privateer's version doesn't work for you try the one that comes with Bl!tzKr!eg's S3F.
http://www.subsim.com/radioroom/showthread.php?t=212462