(1) RIP works well for small-medium LAN's, as the protocol only supports a maximum hop-count (TTL) of 15. RIPv2 is superior to v1 in that it supports VLSM (variable length subnet masking). This is preferred in the case of a more complicated IP address plan (resulting in a discontigous network etc.). For larger and more robust networks, a more powerful routing protocol such as OSPF (open standard) would be better.
(2) RIP will need to be enabled for the VLAN networks that require routing (connectivity to other non directly connected networks).
(3) A routing protocol is required for hosts in VLAN's to communicate with hosts in other VLAN's assuming they are not directly connected. If VLAN's are all configured on one layer 3 switch and all the hosts are connected to said switch, routing isn't required (this is not your scenario). If hosts are on different switches with their respective VLAN's, routing can be configured on all switches that support IP routing, or you can go with a router on a stick solution (where layer 2 switches connect to a router that performs all IP routing). Hope this helps a little!