I'll answer the questions as best I can.
Can I "Attack *Player*"an ally? If so, rare farms are possible.
Attacking your allies is the sort of thing that really should be possible, as players shouldn't be entirely restricted by the diplomacy stances. Perhaps it should be impossible to win rares from another player?
Does losing a duel cost you electrum?
I believe so.
Do players who arrive at their home city while their garrison is fighting get a chance to defend? I can envision a scenario where a player keeps respawning at a nearby town and rushing back to fight off the siege.
If you can make it into the city, presumably the answer is yes.
Is there a resource benefit to capturing hexes?
Capturing a hex means that your element starts receiving tribute from it, which is distributed amongst players of your element each round.
Can a player Aggressively Attacking me follow me into a city in which he is not allowed?
I don't know, but I would guess not for the same reasons that they don't follow you if you fast travel.
If Light declares war on Darkness but DarknessPlayerA is already in a Light city, is he booted? If not, can another player Shadow Leap to DarknessPlayerA?
I would guess that they'd be booted or be forced to move out the next round.
Why siege? The rewards don't seem to justify the required massive coordinated effort.
Capturing cities is a big deal. Players get massive bonuses from having cities, including respawn points, quests, merchants and so forth. If you can take a city from an opponent you have seriously weakened them and strengthened yourself.
Plus there are probably going to be high-level quests where the objective is to capture a city.
You have to move to a town to collect your Global Auction item won. Do you have to move to a town to collect your electrum on items sold? (Really only relevant if there's an electrum penalty for losing duels.)
I don't believe so.
Are there any advantages to Peace or Alliances?
IIRC there are a few, but they are mostly related to a couple of skills, trading, and possibly quests.
Am I allowed to revise my actions before the day ends?
I believe you are.