That kind of PR is bad and it was killing them, but they needed to control Hotz to protect their various licensing agreements.
Probably the thought that they could get themselves out of the spotlight for a while.
Almost certainly (at least the the geek and nerd market segment).
The donation did not form part of the settlement. Think. Why would a corporation like Sony (lover of rootkits) want to help the EFF? They wouldn't. It was Mr. Hotz who gave the money away as this is what he had promised.
I think Hotz had it pretty much right - free speech has been cut in the USA to appease corporate interests. And one more thing:
DO NOT BUY SONY!