I wanted to note that the 32GB of diskspace for data that is typically mounted at /mnt is a temporary disk, so don't store anything here that you want to be persistent.
Q1. The default virtual hard disk size for the operating system (OS) is typically 30 GB on a Linux VM in Azure. The OS disk should be mounted at / and you can store additional data on here.
Q2. The current data disk is likely the temporary disk, which is why you will not see it when selecting Disks from the VM settings. Do not spread data between the temporary disk and Data disk as the temporary disk is not persistent.
Q3. Yes, you can format and add a filesystem with your preferred method. We walk you through one method in our documentation here.
Q4. As stated do not spread data between the temporary disk and data disk. For ease of management I recommend creating separate disks rather than relying on things like LVM or RAID. It is easy to expand disks in Azure without adding the complexity of these systems.
Q5. This page walks you through the steps of preparing a VM for the Marketplace. Please review and let us know if you have any questions.
Hope this helps! Let us know if you have further questions or issues and we will do our best to assist.
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