Answer to 3.
The reason for its cost is because for -3 damage, diamond shield is 6 
, and this gives you -4 (-8 max for upped)
so it is designed to be high cost.
The cost is still too high.
Effectively you are forcing the player to keep a full hand, which either forces a combo or else hinders them from playing cards freely.
That is worth at least a couple of quanta in terms of casting cost balance.
I think power wise this shield is roughly on the same level as diamond shield for the unupgraded version really.
Note that hope shield allows for much higher damage reduction potential than this shield can manage. Granted, its easier for the opponent to counter, but as I mentioned you have a built in double edge here in some sense as well.
I think 7 or 8 is plenty high for the unupgraded version. I would wager you could probabaly even go as low as 6 and still have it be balanced.
The upgraded version is a little tricker since it has a potential for up to twice the impact.
Nightmare combos not withstanding, the opponent has much more control over their own hand, though, so I don't think it should be weighted quite as high.
I think a 2 or 3 quanta cost bump would be plenty there (don't forget that you already get an effective 2 cost balance quanta due to the upgrade).
In terms of what it brings to the game, I like the upgraded version far more. It makes a very nice synnergy with nightmare decks. The cost would probably need to be lowered quite a bit, however, to make it really viable there.
