The PSN is the place to go for legal PSP game downloads.
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Yes, the PSP can connect to the PlayStation Network, where you can purchase and download games.
Yes, if you purchase and download it.
If you're asking whether you can play UMD games in PSP GO, the answer is, no you can't.There's no UMD on the PSP Go. So you can only download games and play them on the PSP GO.
The same as the cost would in a store for a PSP game.http://www.destructoid.com/psp-download-games-will-cost-the-same-as-retail-games-147396.phtml
A torrent is a file that you download that links you to other peers who are sharing it, to download the file the torrent specifies. To download a torrent, you need a client such as utorrent. A psp torrent I am assuming is a .torrent file used to download psp games.