Hi BlueSnowman,
I will answer your questions one by one.
1. Yes.
2. Yes. After installing the ADFS, you can run ADFS wizard and federate domain via PowerShell. Please keep Dirsync running.
Set up a trust between AD FS and Windows Azure AD
3. After you enable SSO, the user passwords will be authenticated by local AD. If the ADFS server is down, the SSO enabled users will not access Offie 365 service. Password sync can be applied to pure Office 365 account.
4. If the SSO enabled users have connected to Office 365 service, due to the catch, the users may not lose the connection temporarily. However, if the user re-log in to it or the session is expired, the authentication will fail.
5. Yes. However, you need to re-set up OU filtering after reinstalling the Dirsync.
Thanks,
Johnny Zhang