There is no information given in the series about what happened to them prior to the Dragonball Manga/anime. However, the first wish made on the Dragonballs in the series was Oolong who wished for "the panties from a real hot girl".
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For people to be revived (his friends & family). But most of the time it is them wishing for Goku to be revived.
On Earth, Kami created the Dragonballs. On Namek, the Namekian elder created them. When the person who created the dragonballs dies, the dragonballs disappear. This is why, after Kami dies, Dende replaces him as guardian of Earth and creates a new set of Dragonballs.
There are 7 dragonballs. If you are reffering to the manga there are 16 volumes.
On earth once but on dragon ball z gt in the black star dragon balls saga you can and will get a rule free wish like bring back a planet with everyone on so you can wish back people more than 1 time like goku wished back krillin with them.
First you have to collect all dragonballs. In some levels there are 7 and in some (cell_day) there is only one (you can make a wish with only that on on that level). When you drop all 7 dragonballs close to each other they will glow. then come close to them and press use item button (default: b). You will get 7 options: strength (increases your PL for 1,000,000+(500,000*wishlevel)), stats upgrade (i'm not completely sure what it does, sorry), unlimited ki (for short period of time), health (regenerates your health), wishlevel (used to incerase effect of strength wish),moon (moon appears, needed for ssj4, only with big pack 8.4), portaras (needed for vegetto, when you take them scroll to them and hold right mouse button, only with goku or vegeta )