Yes it is one of the items that the PlayStation Network has that will allow you to be banned and called Offensive Image or Audio see related question for expanded reasons for being banned
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Yes, your console can get banned if you are found cheating online.
Sounds like normal online playing
no ,only if you cant get online
Blue screen when playing online
You can get banned, but not everyone who does something that can get you banned is actually banned. You have to decide if it is worth it to take that chance. Im not really sure, but what would make the most sense is that you could get banned for moding online play. you should be fine moding offline though. (I really hope this is true.....)