Yes, it does. You'd want the ply as thick as you could easily get. 1/2" or better.
Personal preference, shorter is more stable.
No, why would it do that? It will make it more...Umm...What's the opposite of unsteady?
Depends on what the shelving is made of.
Doesn't really matter much if it's not fully on the block.
Definitely. You should pretty much always have styrofoam under the tank. Especially when you're DIYing something with horribly imprecise materials like lumps of concrete and chunks of rough wood.