Ah, glad you asked!
1) Oddly enough non-sentient plants are not affected by the Gear Waste's...issues. Now of, say, a Shambling Mound made its way up to the Gear Wastes from the jungles and somehow bred, then you'd have a metal/clockwork Shambling Mound. I could see there being some trace amounts of metals (Not enough to bother harvesting) in the plant life that helps the mechanical herbivores grow however...
2) The process in which the animals reproduce is still unknown, but for all intents and purposes they grow, eat, breed and do pretty much everything that fleshy animals do. Just...mechanically.The herbivores eat the metal laced plants, process the metal and leave the plant and somehow use the metal they digest to grow.Scrap that we're going with another theory. Internal True Creation and Fabricate spells powered by biomass (grass, leaves, etc. for herbivores) or metal "flesh" (in the case of of carnivores) allow for growth and the creation of new creatures. Try as they might, hunters and researchers have yet to be able to harness the two spells for their own purposes.
3) Dwarves do indeed exist, though they've abandoned their hold on the Wastes a while back. The only sapient race native to the Wastes that still lives there would be harpies. I suppose some might have begun exhibiting clockwork-like qualities, though most nests are in the south down by the jungles.
4) Well initially I was just running with the idea of "Werewolves are neat!" which evolved into the origins of the Principality. Basically, Pre-Barrier, the research lab at Full Moon Lake was experimenting with the scientific cause, cure and practical application of the Lycanthrope disease/curse. The Barrier went up and the researchers (several hundred) got locked inside. Thankfully, they had enough provisions to last for several years. When they finally unsealed the lab, they were greeted with more or less a D&D version of Fallout, but with less guns. They figured that if they were going to survive (None of them were really combat trained) that the best way would be to use the samples of lycanthropy they had in the lab to give themselves an edge.
So they all Lycanthrope'd up, carved themselves out a hunk of land and started re-establishing civilization. People came to join the settlement, the Researchers relayed tales of the past which got garbled over the years into the religion they have now (Telephone woot woot) and a sort of caste system was established. Bam, the Principality (The tl;dr version). There's a bit more to it than that but that's the gist of it.