Yes, user selectable.
Yes, no payment needed, all free.
No, not needed. But disable the antivirus scanner before running the install is a good practise.
You may be on the edge of space needed so if you can move one of the installations to a new disk I would do that. After installation you can remove 2.2 as that is not needed and all you have in 2.2 today will be in 2.5, Nevada is there you know. :)