1.) It will pass 1080i through HDMI if the input is HDMI, that is correct.
3.) You are right, the trigger will not be helpful for this application.
5.) The Denon can't pull the audio off HDMI sources, so no matter what HDMI sources are sent to the Denon it will not be able to pick the audio out from it. It will pass through and no audio will be present. Using a coaxial, optical, or analog output from a source with HDMI would be the only way to get audio. You can use HDMI and another output simultaneously. It is worth nothing that you can't get high resolution audio from SPDIF (optical or coaxial) and analog audio output from a Blu-ray or HD DVD player would be the only way to get the lossless sound with that receiver if input in the analog multichannel input.
Pipelayer, your decision is fine. The Onkyo TX-SR605 is an excellent receiver. I just believe the Yamaha RX-V661 is a more flexible receiver and meets the criteria of the OP a bit better for the price.

HDMI 1.3 is not a necessity for HD audio like some may think, and it is a major selling point for the Onkyo TX-SR605. People have noted having small issues with the Onkyo such as popping (slight clicks when an input is changed or audio comes in), but rather petty annoyances.