This is mostly an answer to (3), but maybe it also clarifies the other questions that you have.
Loosely speaking, the domain/structure/interpretation is what you need in order to make sense of all the elements of a formula. Since propositional formulas and first order formulas are different, you need different semantic structures to interpret them.
In propositional logic, formulas are just combinations of propositional variables ($p,q,r,\ldots$) by connectives such as $\land$, $\lnot$ and $\rightarrow$. For example, $p\land(q\rightarrow \lnot r)$ is a formula. In order to make sense of such a formula -- that is, in order to know whether it is true -- you only need to know the truth values of the variables. This is called an assignment.
In first-order logic on the other hand, a formula might look like this: $\forall x(P(x)\rightarrow \lnot Q(f(x))$. That is, in addition to the propositional connectives you now also have quantifiers ($\forall,\exists$), relations $(P,Q,\ldots)$ and functions ($f,g,\ldots$). To give a meaning to such a formula, you must know: What is the range of the quantifiers? What are the relations $P$ and $Q$? What is the function $f$? So in order to interpret a first-order formula, you have to pick a domain (this can be any nonempty set) and corresponding relations and functions on that domain.