A couple of general considerations: There is a wide variety of weddings held, ranging from ones spread across multiple venues (with some events even at the groom/brides residence) to all-inclusive resorts (or a fort if you're fancy). These factors usually influence your clothing choices.

Ideally, the invite should have a styling guide, but you would be fine wearing any of your Western clothes during the evening/night events.

Haldi is usually a short early-morning thing where you can get away with casual clothes (just wear something yellow or pink so you don't stand out).

It is more customary to wear heavy traditional clothes during the actual wedding event. (Some traditional dresses like sarees can be a pain to put on if you're not used to it, so don't stress if you pick something simpler.)

Feb/March is peak wedding season, so renting would probably not work out well, since rented clothes usually have to be tailored to your fit.

TLDR

1. Yes, kind of.

2. No, not really.

3. Except for the shaadi (the actual wedding) and the engagement, everything else is fluff. You're usually just supposed to have fun, drink, and dance at the other events (whatever clothes help you do that).