In general, using an engraving (V-) bit does yield better-looking smaller letters. However, I have to disagree on the cleaner mask edge - a down-cut bit produces a cleaner-cut top edge (in this case, a cleaner cut of the mask), hands down.
I’ll have to give this a shot. I’m a sucker for a good experiment, I’ll have to set up a side-by-side of this.
I don’t. 
This is debatable. A 30 in x 10 yd roll of Oramask 813 can be had for $35 shipped. Per square inch, it’s actually pretty comparable to masking/painter’s tape. I find being able to cut custom shapes in the mask well worth the (very) slight cost increase vs. the hassle of attempting to lay a perfect tape line, especially if I’m not masking straight lines. If I’m doing something like this project, the Oramask ends up with a much cleaner cut edge, as well.
I do want to try working with epoxy as a color medium. More experiments!
Thanks for the suggestions!