Good job on the diagram. That really helps out. It looks like the Co2 needs to be fed into the regulator from the bottom where there are male threads. I would get a 1/8 to ASA converted fitting and run it like this:
Quick change -> ASA Tank Cap -> 1/8 to ASA fitting (routed to bottom of regulator) -> Regulator -> Macro-line (out of side of regulator) -> Small A-10 Regulator -> More Macro-line -> Quick Disconnect -> Magazine
That looks to be how the regulator works. I've never personally handled that regulator though. Just make sure that the CO2 feeds into the bottom of the regulator, there's a hole on the side for a gauge, and another hole on the other side for the macro-line.
Now for the questions:
1. For the fittings to work with the macro-line, you have to buy a special fitting. It has threads on one end and on the other end, it has a slip fit that you push the macro-line into. Here's a pic of what it looks like:
http://palmer-pursuit.com/cart/index.php?main_page=product_info&cPath=75&products_id=94
2. What I said above hopefully solved/ cleared this up
3. Even with the reg being broken in, it should still have a noticeable increase in consistency of propane.
4. I think that this could be a nice compact set-up. I would still run a small A-10 regulator down the macro-line maybe to just help the consistency a bit.
I know some of this is hard to explain and gets confusing. Feel free to post more questions if you run into some other questions, or decide to change up your plan a little. Happy to help!