well....i hope at least you have the game first...cause some of this should be in the manual, if not all of it. But since im nice i'll help you anyways...
1. Hit the "2" button.
2. No, you have to unlock them through story mode.
3. They're unlockable charactars you get. And if you have the right two charactars like under free battle or tag battle then you can fuse them togethor with some button, I forgot which button it was right now.
4. Just to strengthen your charcatars. Kind of like an RPG. Some of the items raise defense/health/attack/ki/etc. while some give you special abilities like unbreakable guard or you can hit the person while they're down and stuff.
5. Yeah, I'd say the story mode is relativly long, it goes through every saga from DBZ to DBZ:GT. Including the movies and such. And to unlock all the charactars you have to fuse items, which you get from story mode. You can also get charactars from just playing the story mode.
And i swear this is like the third thread you've had on these questions...