Well, I dunno how easy it is to "cancel" your yahoo account, but it is generally straightforward to move your hosting account and your domain registration. It does get slightly more complicated if you want to totally minimize downtime.
You can certainly arrange for the switchover to take a minimal amount of time. This does require that you do things in a particular order and generally requires you to "practice" a little.
Yup. One feature to full hosting is that you have as much control as you want. Of course, each extra level of control that you have makes configuration and management that much more complicated. We have a wide variety of "levels" of control here at Dreamhost that we can choose, but rest assured that there's certainly a level where you can control your .htaccess file.
BTW, if you want to do that, I suggest using the "Advanced" One-Click install, not the "easy" one.
Finally, remember that almost everyone posting here is a customer and not a Dreamhost employee (and they're easy to spot).
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