A Boolean cut uses an object to change the form of an other object. Check out the documentation, here:

https://docs.blender.org/manual/en/latest/modeling/modifiers/generate/booleans.html

Yes, but either scale the object as a whole, or drag groups of vertices down or up, for example, to change the height of a door or window. Don't just scale along the Z axis to do this. It will smash the bevels and distort the details.

Yes. Game models are getting more and more complex these days, and low poly doesn't mean what it used to mean. That said, there are no hard and fast rules.