Yup, done this many times, on my boat and for friends.
1. A chain to rope splice is as strong as a splice around a thimble. Though it seems far more compact, ther are still 3 strands going through the chain, and because they are unlayed, they share the strain more evenly. Fewer parts to fail, with no shackle, and much smoother run.
2. Yes, resplice. This is a normal maintance procedure and should be repeated every few years, depending on use. Only the terminal link or 2 need to be removed. This is perhaps the easiest splice to learn, but practice with a scrap first. Actually, since you are going to trim the rode way back, you can simply practice with the end!
3. This is the ONLY way you are going to get the chain through most windlasses. However, I will warn you that you may need to trim 10-20 feet from the rode, if the rode has become fuzzed through use. This fuzing will result in the splice being too fat for some windlasses.
4. Yes, bolt cutters are best if you've got em.
5. Chafe is only an issue because this is way over due. You'll see that it's a 10 minutes job the second time.
Just maintance.