I would think it might do a lot better in battlegrounds then in arena.
Whenever Cataclysm releases, we will have rated battlegrounds.

In any of the larger scale BG's, you'll have the healing power to keep your side up, probably through just about anything.
Especially if they change burst damage, as they have advertised they want to.

Not really sure you can win in arena with 5x Resto Druids.
But you can definitely prolong the matches by a large margin.

1. & 2.)
Treeform ups your heals by a large margin, and armor as well. But it precludes most of your offensive spells.

If you're not going for Tree Form, I'd look into a Dreamstate build or something similar. Basically deep enough in Balance for Moonkin and deep enough in Resto for Swiftmend.

Dreamstate was a healer build, but it costs you Wild Growth. Wild Growth is an amazing group heal, which when you have one healer and a party/raid, or that type of mechanic, you would not want to be without. However, with an entire team of healers, AoE healing is less necessary.

You could play around with only one toon as a Moonkin at a time, and have your heal macro built for [nostance:x], so whichever toon is Moonkin doesn't drop the stance. Optionally, only spec with one or two toons, and use the talent point elsewhere, but possibly have a toon who is more focused by the opposition.

3.)
Unless you build for some form of killing, you'll likely lose every arena match, even if they are drawn out. Dreamstate gets you pretty decent single target heals (a lack of AoE heals, aside from Tranquility), but does get you decent Wrath/Starfire/Moonfire/Insect Swarms. But you miss Eclipse, Force of Nature, Typhoon, Earth & Moon. Not sure that it will be enough, but deep resto probably won't for arena; although depending on your team, it can be for BG's.

4.)
Having 5x Rejuvenation ticking on all toons at once, will be substantial healing vs any switch. You also have Swiftmend for burst healing, Nature's Swiftness + Healing Touch, can add Lifebloom's to the mix. The challenge will be deciding which HoTs should be kept up constantly, and then having the ability to add others relatively quickly as a toon is focused... realizing they will probably switch between your toons.

If one toon is focused, you could always shift that toon to Bear, and just survive. You'd have the 360% armor increase, even if you did not have any feral specific gearing. PvP resto gear will likely have a lot of stamina on it, and a fair bit of armor.

5.)
IWT is a very good fear recovery tool and it is a decent way to group your team up, on any npc/player.
You are not dependent on facing for your heals... However, I've found I am required to face my target for Moonfire, probably because of the DD component of the spell.
As long as your toons are within heal range of each other (and you'll have to be wary of Death Grip to single one out), you won't need to be closely grouped up.
You can play with spread out macros, and IWT to bring them back together.