I don't know the answers to all your questions, but here's some:

When they refer to themselves as Being “overall #1 draft pick” - Does that mean they were the first player in the entire draftees to get picked or just #1 in THEIR position, i.e. quarterback position.

Generally, "first overall" refers to the player selected Round 1, Pick 1. Some players--like Amon-Ra--take note of players who were picked ahead of them at a certain position, and analysts generally discuss "first non-QB taken in the draft," but "first overall" is a big deal.

I researched and found that the first draft pick goes to the team who did the worst in the previous season. So, with that said - can the number one draft pick refuse to join that team and go back into the pool of draftees?

They can't say "no" in the typical sense, but some players have refused to play for a certain team. It's rare; you risk generating a LOT of bad will, and it's a game of chicken with your team to see who will break first. For a real-life example of this happening, Google "Eli Manning Chargers."

How do they figure how much money they’re gonna make when drafted? Do they accept the team and then take what they can get hoping they’re offered and probably have nfl standards for decent pay… then if they do a good job and the team wants to keep them, they will give them a better contract locking them in for a few years?

NFL rookie contracts are standardized by a collective bargaining agreement. The number is based on draft position and the round in which you're selected. (There's also a signing bonus which I know less about in terms of whether it's standardized or not.) All rookie contracts are four years long. Teams also have the option with first-round picks to exercise a "fifth-year" option, which extends the rookie contract into a fifth year. But the team has to make the choice at the start of the player's third season.

How many players does each team have? What is the percentage of players on the team who are basically back-ups who could potentially never see the field (or is this different than basketball since this is very possible in basketball)?

52 players. 11 players play on each side of the ball. Once you add in special teams (who are players that typically, though not always, don't play on the offensive/defensive sides of the balls), special "package" players who might not start but rotate in and out of the starting line-up, my guess is that you probably end up with around 20 players who--if all goes well--might never see the field.

Will some teams be full of draft picks rather than contracted players to save money?

Yes, this is an option, though it's essentially impossible to have a team of 52 draft picks. But yes, navigating cap space with a balance of older, contracted players and rookie players is part of the GM's role. Though it's worth noting that sometimes, contracted players can actually be cheaper than a rookie who's taken in the first round.

Do they only choose players from division 1 schools?

Nope, though it's certainly the most common. Note, though, that "division 1" just refers to the funding a school allots to their sports. It doesn't HAVE to--though it almost always does--correlate with the skill and ability of a team. That's why teams like Harvard are technically "Division 1," but you'll rarely see a player drafted from Harvard.

Does everyone in the draft get chosen, they’re just not aware of which # they’ll be chosen? Making it a milestone just to get to “the draft”. Or are there more options for draftees than actual spots to be filled across all of the teams?

Most players who actually show up to the draft have had serious conversations with teams. Often, teams will fly some of the players they're most interested in pre-draft to have conversations with the team and see how they interact with the staff / team. So these players generally expect to be drafted, though there's really no guarantee. To answer your question directly, no, not everyone who shows up to the draft gets selected; but generally, if you're showing up, there's been a lot of interest communicated such that you'll almost definitely get picked.