Right. First of all the word is gauge. Now, to answer your questions.........
1
The gauge to which you are referring to is the running gauge. This - with the exception of Ireland, Portugal, the Spanish "classic" lines and Finland is the same throughout Europe (I haven't included Russia) which is 4' 8.5" in black and white, 1.435mm in colour. This is known as standard gauge. If narrower it's narrow gauge, if wider it's broad gauge. In mentioning our "narrow gauge" you're getting confused with the loading guage which is the dimensions that a rail vehicle is allowed to be. Britain's is the smallest This can be best seen at St. Pancras when a Eurostar train is sat in the platform where there's a fair gap between the train and the platform. If you can get hold of a picture of the German train that was in there last October(?) you'll see that it filled the platform edge completely.
2
Don't know but a sensible (what, in this country?) decision would see it being built - if built - to the UIC gauge (that's the generous so-called Continental gauge)
3
The original London and Bristol railway that became the Great Western was originaly built to a 7' running gauge. This was reflected in the somewhat more generous loading gauge. The entire Great Western was converted to standard gauge late in the 19th century - over one weekend! (a lot of preliminary work had been carried out beforehand though). The legacy of this can be seen in the greater distance between the running lines over former Great Western territory.