you can get free SR servant from events, there will be 2 christmas events soon which will get you a good Rider and Lancer.

you level up servants by feeding them embers, you mainly get them from events and ember gathering daily quests.

click the gray space below your servants art on the pre battle screen to equip CE's.

you can easily clear everything without using high tier servants, many of the low rarities are pretty good and the welfare SR's from events are often very good, if you happen to get an SSR servant it just makes it even easier.

Nope no pity system, what you see is what you get.

Dantes should be back ~february.