First, for the rule related question, this isn't an official forum, anything you see is ONLY an opinion...
Answers match your questions by number.
1. Depends on what the ceiling height is where your competition will be held. I'd say a minimum of 20 feet, and you want SOME practice (at least a couple of hours) at a location with a height near what you will compete at.
2. Limited. You need to hand toss the glider before you glide it to check basic trim. But best glide trim often does NOT match trim needed to transition well near the ceiling and that is key to the event! A so so trimmed glider that transitions near the ceiling will beat a well trimmed glider that doesn't transition to glide until half way down from the ceiling.
2b. Possibly OK. One of the required parameters is length of the elastic, doesn't say you have to use it for the data recorded... Should get you credit for at least an incomplete flight log. Might be stretching things with some event supervisors. Why not do 10 hand glides and 10 elastic launch glides, even if the ceiling is short. There is nothing wrong, and a lot right about far exceeding the minimum flight log requirements. Data collection and analysis are the HEART of this event.
3. If the weather is suitable outside testing is certainly OK as a supplement. Some wind is OK, you don't want a lot as it may confuse your results making it hard to separate the effects of wind from control and launch changes. Outside can be nice if you launch in a grassy field, fewer broken airplanes while you get the trim right to transition where you want it. Try to figure out some way to measure or estimate max height so you can practice at controlling launch to specific heights. You will still need significant testing indoors for accurate transition height, but you can learn a lot outside about how to get a glider to transition at max height and glide ALL the way down.