I'm going to first preface this by saying that I don't usually recommend Windows Mobile to others. Unless you have a pretty high technical understanding and -enjoy- tweaking (not just capable, but enjoy), I would generally recommend a different mobile OS.
Now, for your questions:
1) As the other poster said, try the 9.7 beta, or something else like Skyfire. You have to download and install them, google around, find their official sites, etc. Just install the new cab and it installs a second one since it is a beta...otherwise it would upgrade.
2) I haven't had any issues with my touchscreen...pretty standard like the ones I have used for the last 8 years (Palm m505 was my first PDA)
3) The default today screen is extremely dated, like much of the OS. SPB MobileShell, phoneAlarm, BatteryPlus, are among some of the things to try.
4) HTC Contacts: Menu->Filter, Default WinMo: Menu-> Filter
Also a nice contact app is iContact....duplicates iPhone one. But I personally like the new HTC version.
5) That's just the behavior of it. When the first built WinMo, they were thinking computer, not phone. It behaves much like the desktop Windows sound selector.
If these are your issues so far, then you will have many more to come. Like I said before, if you *enjoy* tweaking, then stick with it and once you figure out how you like it you will be good. But if not, I might suggest you consider something like a Blackberry device or wait until January or so when Verizon is rumored to get the Palm Pre or other WebOS device.