It sounds like they've just disabled your databases, which is better. At least they can turn them back on once things get resolved.
1) They don't set many hard limits because they evaluate issues on a case by case basis.
2) If things start looking bad, they give you a polite warning. If the database server gets hammered so hard that nothing works, they've got to shut down the heavy user immediately to save the rest of the users.
3) Again, it's case by case. Say they limit you to 5 MCn per month, but you use them all up in a day during a Slashdotting. They've got to turn it off. Only Support knows why your selected databases got disabled.
4) Dunno. We're not DreamHost. We can't even speculate because we don't know your setup.
5) Your database(s) did stop responding during the overload (they turned them off). It's up to you to troubleshoot why your site spiked, they can only tell you why they shut it down. The mail you sent you should explain what your next step should be.
6) PS isn't by invitation only. There's just a waiting list. However, this issue may speed up moving you to PS if you ask Support.