Your k-mount lenses will work with the k5. Best to order through B&H from here (through the forum). It helps the forum out and you'll get free access to the marketplace. You'll need to look around for a k5 - it's out of production (I believe). But Pentax has a $100 rebate this month on all bodies, making the k5ii a nicely priced camera: Pentax K-5 II Digital SLR Camera 12016 B&H Photo Video
It depends. Right now, with the $100 rebate, I would say yes. I have a k5 and k5iis. The only difference between the ii and the iis is the iis doesn't have an AA filter - it can produce sharper images under certain circumstances. It can also cause unwanted moire in your shots. I love mine and have been very happy with the results.
I say yes. But only if the IIs is paired with quality lenses (specifically the Limited primes or DA* lenses or third party equivalents like the Tamron 70-200 or Sigma 70 macro, etc). Otherwise if you're just using kit lenses, then you may as well go with the II.