(1) Yes, all current online characters and their items, crafting materials, etc. will be moved over to the Legacy realm at launch.
(2) Yes, though you’ll still have to select the Item Faction of your choice (Merchant’s Guild or Circle of Fortune) at some point during the campaign. So characters that have already completed the campaign will likely have to go back somewhere within it to do this.
All current items do not have a faction requirement, nor are they planned to after launch so you’ll be able to trade everything you’ve currently found at the Bazaar if you join the Merchants Guild and level it up as necessary/accumulate the necessary Favor to sell these items. However, any item sold at the Bazaar will then have the Merchants Guild requirement added to it.
There’s other stuff I could talk about, but the Item Factions dev blog and the expandable FAQ located at the bottom of that post provide a lot of additional details.