1. This shouldn't be an issue. Nintendo has allowed for carts containing multiple titles for years now. Inserting the cartridge causes all the games on it to appear on the home screen.

2. The Switch is massively popular. Assuming the cartridge works and sells even somewhat well, we will 100% see games being shared in whatever format it uses. It might take awhile for the Switch's full back-catalog to be dumped and uploaded in the new format, but popular / recent titles will be circulated within a matter of days. If there's a way to convert existing XCI / NSP rips to the new format, there are plenty of individuals / groups who will race to get everything converted as quickly as possible.

3. Assuming the cart is completely transparent to the Switch, which is likely to be the case, then I see no reason why updates wouldn't download as normal. If Nintendo is able to detect the carts and ban Switches that use them, it may still be possible to access updates by rolling them into the same file as the base game and loading them from the cartridge. Personally, I think the second option is fairly likely, as it's already possible to do this with NSP rips, and it's the method that offers the most resistance to whatever countermeasures Nintendo may deploy.

It looks like each game cartridge has an unique serial number. Nintendo could easily blacklist everything that touched a specific serial, because they can see from the telemetry something like 500 consoles ran the same cartridge in a day, immediately raising red flags

Considering the non-security of the Wii u ("ah, you say you have a ticket for a game? Sure, feel free to download from the servers, I trust you, don't need to verify that"), I'd assume that until a serial isn't blacklisted, the console would automatically download updates as if it was original

Seems like multiple games are swapped by removing the cartridge and reinserting it, would swap to the next title. So, 3-4 titles max or it will be annoying

This is a newb talking so take it with a grain of salt but

1. From initial videos it looks like when you pull out then put the cart back in, it seems to swap between games. So guess is that for the switch it looks like a normal game, not an initial boot interface to swap between, but what boots depends on which one the cart is chosen in the loop.

2. You're right it would be their own type, and likely a converter between them assuming the team doesn't put some sort of proprietary stopper

3. Likely the switch itself won't know the difference, but Nintendo has dealt with this problem in the past with the 3ds. They add a unique code to every game, so when you pirate it and try to download and update Nintendo can see 1000s of downloads of the same game with unique key, then they can just ban the console. Same if you try to play online (then later patching happened where you can change the key yourself). Downloadable updates where available then afaik