1. They do decent DPS and have a nuke with a guaranteed crit (good for PvP). They also mitigate both physical damage (mail & shield) and magic damage (through grounding totems, which stack). Totems also offer a range of complementary buffs, and some stack (healing stream for example). Overall they tend to offer the best 'synergy' of stacked classes.

2. For PvE, you can pretty much make any team work as long as you have a tank, and the DPS & heals to back them up. Pallies make excellent tanks for boxing, since you can essentially 1 button tank with a macro. 4 priests are unconventional, but definitely viable for PvE (although they will suffer a bit from lack of stacking buffs). Probably not a good choice for PvP, since as you acknowledged, they lack burst.

3. Class stacking is good for new boxers since it's often easier to set up, get going and requires less micro-management than a mixed team. In terms of heroics though, you are definitely going to need a tank (although Maxxion has had some success brute forcing heroics with 5 shammies), since most heroic mobs and bosses will blow through pets in a few hits. Clothies can expect to be one shotted (two if your lucky ).

4. There's not really an "official" server for boxers, however the two with the highest boxer population would be Kil'jaeden-US for Alliance (PM Svpernova09 or Fursphere for more info) and Magtheridon-US for horde (send me a PM for more info). New boxers are always welcome!

Cheers,
S.