Technologically, Tamriel doesn't seem to be advancing too much. I wouldn't say that the laws of magic slow down these advancements, but rather I don't believe anybody really gives a damn and wants to try inventing new things. Arena took place in 3E 289, Oblivion takes place almost a half-century later, and I saw very little change. Arena's Tamriel seemed to have been portrayed in a more "Dark Ages"-esque mood, but I attribute that both to the Simulacrum and the fact TES lore hadn't even begun to be flushed out at this point in time. Then there's Redguard, which takes place during Tiber Septim's life - Dwemer constructs aside, again, I see little change.
Correction, Arena started in 389. Uriel Septim VII wasn't even alive in 289, and arena was focused on the fact that Uriel Septim VII was kidnapped.
Any who, as to my answers:
1) In OB, the majority of it portrayed that the empire was good an wholesome. In reality, it should have been much different. You have the Nibenese east, which is filled with imperials that are big talkers, and dealers. They're a culture of being about to control using the power of speech and making the other guy do your dirty work. They also live in mostly jungle. Then you have the Colovian west, which is a culture that is pretty nordish. They're imperials that live in rolling planes, with a culture entrenched militaristic duty and values. Remember, Tiber Septim was a Colovian. They're very proud, and strong, though not as much of a talker and traders as their Nibenese cousins to the east.
Now, when you have these two groups of people as the most powerful nation, living in the heart of their empire, they should come off as being superior, with good reason too. Cyrodiil owns everyone, and that kind of attitude should have been more reflected. In MW, we got a taste that the Dunmer don't like outsiders, and won't hesitate to tell that to your face. They think they're superior, but they don't own everyone. In Cyrodiil, they have the guns to back up their claim that they are better than you.
So, to answer question one, it is possible for a poor man to rise to the top, but will need to crack a few skulls and get your hands dirty. In addition, it's only if you are an imperial or a "civilized human." If you are an elf, forget it. Unless you came from a respectable family or are already rich, don't expect to climb higher than middle class. If you are a beastman, the situation will probably be harder than the elves, due to being more alien than everyone else.
2) I wouldn't be surprised if they are; they're pretty alien compared to everyone else. The khajiit are looked down upon as being thieves and sneaks, while argonians are very alien and don't really show much emotion. I don't they will be refused service, but it is probably expected that if they were to try and barter from an imperial merchant, he'll try to cheat them harder than most other races.
3) 1350-1500
4) Slow the hell down. Take into this perspective. It was not until about +3000 years leather armor was the standard "best" armor one can be equipped with. Pelinal's armor in the first age was considered HIGHLY futuristic. Since the second age, weapons and armor haven't really advanced at all, and they've had more time than we did in RL. Plus, a lot of magic ability seems to remove a lot of necessity that's needed for ingenuity. However, I would like to note that magic in the last two games have been a little too common. I like to think that DF showed the correct ratio of magic user to non-magic user, which was about 1:10. So, in a town of 100 people in DF, you could find at most 10 magic users. In MW & OB, that ratio seemed to have spiked a lot. I'll give SOME leeway in the case of MW, because elves seem to have better connection to magic than humans, but in OB it became a little ridiculous.