2) This can improve the finish on some machines. It is not a total refinish, more of a repair. If the machine is already in beautiful condition, as if never used, don't bother. It is good for some of the small defects--alligatoring or cracking in the finish, some white spots from moisture (shellac is prone to that), dullness, wearing thin, small spots without shellac.
3) The decals: French polishing does nothing to restore decals, and for most of the process you want to stay away from them, because the alcohol can damage them. Once done, it will protect what is left of the decals.
4) It will not do anything for the paint itself. If there are small chips in the paint, you can get a Testors paint pen from a hobby shop and touch up with that first. If there are major areas of missing paint, that is a whole other problem, and something other than French polishing is needed.