Why not encrypt it on your throw away USB stick OS? If you move the PDF unencrypted to a different machine it make no sense to set up the USB stick OS in the first place as it offers you no additional security.
Yes, even on low entropy systems (e.g. new OS on SSD/USB stick). The mouse movements required at the start provide enough entropy to make the key generation random.
Yes, if you are careful. More below.
P.S i don't want to print a paper wallet because i am too paranoid i may lose the paper or damage it
The "problem" with spending paper wallet funds are the software you use to do so. If you have 7 bitcoins received to a paperwallet, these 7 bitcoins are considered one or more inputs you can spend. Lets assume for simplicity you have only one input. You can think of it like a 7BTC bill or a lump of gold (I will go with the gold for this example). If you want to spend the 7 BTC lump you have to melt it down and create pieces of lesser value. Different wallets do this differently. Some would send the 5 BTC you want to keep (assuming no fee for simplicity) back to the address you previously had the 7 BTC on. Some would create an entirely new address for this. Its best that you prepare another paperwallet and manually send the lump you want to keep to it.
E.g. you have 7 BTC and want to send 2 BTC to Alice while keeping the remaining 5 BTC. You use the funds from your old paper wallet to create a TX that sends 2 BTC to 1ALICEvanity and 4.9998 BTC to 1myNEWpaperWALLET the remaining 0.0002 is used as fee.
AFAIK not, the way I understand what mycelium does in this case is that it sends the 5 BTC to a newly generated change address that is part of your mycelium wallet. I also think its a bad idea to reuse a paper wallet. The whole idea is that you have an offline key, one that was never on an online system and thus can not be affected by a virus. This is longer the case once you use the paper wallet at least once. Hence the suggestion to create a new one. On the other hand you dont store it on paper either, so maybe something like Tails[1] is better?
Because its the same transaction. A transaction can send coins to many addresses at once.
PGP should be available by default or you could use something like e.g. VeraCrypt (which is based on the famous TrueCrypt) sinec you need to get some software on the stick from the internet anyway.
I dont think it matters much. You might want to use electrum from a live OS like Tails though since this would solve your "change" problem. Instead of a private key you would secure the seed and restore the wallet from that every time you want to spend some coins. The seed would (unlike a private key) cover all future change addresses and can offer you different addresses as well. Electrum is also preinstalled on tails, so you would not need to install any software. Tails does not come with VeraCrypt yet[2], but they have different means to help you encrypt data.
[1] https://tails.boum.org/
[2] https://labs.riseup.net/code/issues/8911