You ask:
How do I make the footnote hang on a new line? ie have "2012 )." align with the beginning of "Susan" instead of "1".
How can I increase the vertical space above and below the footnote line? Can I make this a flexi space?
To get "hanging" footnotes, you could load the footmisc package with the hang option:
\usepackage[hang]{footmisc}
I assume that by "footnote line" you mean the short line that separates the main text block from the footnote material; this line is frequently called the footnote rule, or footrule for short. One way to change the space between the last line of the text block and the footnote separator line is to load the geometry package and set the desired space in the footnotesep option. You don't specify how large this space should be; if it were, say, 2\baselineskip, you could load the geometry package like this:
\usepackage[footnotesep=2\baselineskip]{geometry}
I would recommend leaving the default amount of vertical separation between the footnote rule and the footnote material itself unchanged. However, if you must, you can change the space left blank above each footnote (including the first one in the footnote block) by doing a \renewcommand on the parameter \footnotesep; its default height is 6.65pt if the main document font size is 10pt, and slightly more if you're working with 11pt or 12pt as the main document font size. E.g., you could issue the command \renewcommand{\footnotesep}{1\baselineskip}. Note that this parameter has a backslash, whereas the similar-looking option to the geometry package does not.
I'm not quite sure what you mean by "flexispace". In case you mean that the footnote material should always be at the very bottom of the page -- which, in the example above, is equivalent to saying that the footnotesep amount should be anywhere from 2.00 to 2.99 \baselineskip -- use the option bottom when loading the footmisc package.
The following is a minimal working example that illustrates the operation of the two suggested settings. The lower part of the resulting first page looks like this:

\documentclass{article}
\usepackage[hang,bottom]{footmisc}
\usepackage[footnotesep=2\baselineskip,margin=1in]{geometry}
\usepackage{lipsum} % for filler text
\begin{document}
\lipsum[1]
Some thoughts.\footnote{\lipsum*[2]}
\lipsum[3-10] % fill up remainder of page and then some
\end{document}
\headerfontsizecome from? – karlkoeller Sep 14 '13 at 07:12\addbibresourceto after\usepackage{biblatex}(which defines the command); and move\renewcommand{\headerfontsize}to before its use in\fancyfoot[C]and make it a\newcommand. And remove the redefinition of\@makefntextand use\usepackage[hang]{footmisc}as suggested. – jon Sep 15 '13 at 05:56