>>1. No, I disagree! as He can't add the role to be displayed below his Avatar :P
If you would like admin of the site to be able to add a role to himself, you will need to modify the code.
In your case, I think that it is easier to create an avatar image for the admin which will have the role's name as part of the image =)
>>3.
Yes! Any moderator can edit roles for himself and even can
assign/unassign base and admin permission to himself. and can do
anything after gaining moderator access
You will just need to un-check "Admin" checkbox on the "Moderators" page.
Moderators can change roles only of they have admin rights.