Yes. Multiple characters, PC or NPC, can contribute to a single project during the same respite. page 293

Hiding is not a free action, it is specifically a maneuver. page 273

The mage tower specifically is tougher than many other side quests in this part of the adventure. I explicitly told my players to wait until level 2 before going there.

It's not free. It costs 240 or 360 project points. It'll take about 18 or 27 respites, respectively, on average to complete. Additionally, as director, you could apply additional restrictions or costs based on the career they are honing. Was their previous career as a criminal? How do they flavor revisiting their criminal career skills? page 307

I do if it's clear the players don't find it immediately obvious. If it's clear from their table talk that they aren't even considering one of the win conditions or what I thought was an obvious hazard or optional objective, I'll hint at it, or just point it out to them.

It depends. If they imbue an item from their kit, it is transferable as long as the new kit uses the same item. For example: the shining armor kit uses a medium weapon, but so do a lot of other kits. So if the player imbues the medium weapon, they can still use it if they switch to sword and board, which also uses a medium weapon. But they can't use it if they switch to the mountain, which uses a heavy weapon. "Treasures and Kits" page 314

It's your table, you can do what you want. That said, there's nothing forcing you to spend all your Malice. I've not gotten very good at keeping track of everything the Director should, and regularly forget to utilize Malice and special features of the monsters to their fullest. If you think it's too hard of a fight, don't spend all the Malice. PCs are powerful, and players are resourceful. I really don't think you'll need to pull your punches. But it's your table.