I am answering the questions baed on standard configuration. Some RAID tools can be configured otherwise, but in MOST case, they all function the same way.
1. ONce a drive fails, the spare kicks in automatically (Most of the time), but under some configuration you MIGHT have to MANUAL tell the spare drive to activate. Also, make sure the SPARE drive is covering the right array and also the same size as the failed drive. There is no fail partially, or completely, just fail. :) This way they can keep you buying new drives, and make sure you can never accused them of taking chances with your partially failed drive.
2. Hot-Swapple depends of the RAID Controller, and the actual hard drive MUST be hotswap version also. You must double check the Model # and the RAID Model #.
3. Yes, if hot swapable, just remove and reseat with a new drive. Done. But if NOT hotswappable, you might cause a crash to the system. Some RAID will not, but some will. I won't take the chance until you are 100% sure. Just to be on the safe side.
4. No need, the rebuild has nothing to do with failed drive. You can insert the new drive as long as the failed drive is already out of operation.
5. Yes. Usually, but as I have mentioned, some RAID does not convert back and leave it as is. So you actually have to set the new drive to space manually.
Good Luck