I think Dafont's popularity has been steady or increasing. I get about 20,000 downloads a day. If I average the number of daily downloads over the last 12 years, it's 13,256. And my fonts are much lower on the charts than they used to be. But I think you're right about web ads.
The number of legitimate (not deliberately pirate) free font sites has decreased. In 2011, I received a C&D and was required to contact every free font site and ask them to remove a certain font. It took a solid 3 weeks. There were hundreds of them. Many of these were a "free font site in a box" that was being sold on eBay based on a mangled site rip of 1001freefonts.com. People who run free fonts sites are often very elusive. So many free fonts sites have broken contact forms or no contact information at all. Folks, be extra careful about trademarks in your font names because cleaning up the mess is no fun.
In 2014, I received another C&D and had to do the same thing all over again. This time it took less than a week to have the font removed from every free font site. I think over a hundred of them had vanished and new ones hadn't popped up to replace them. I suspect those clone sites earned their owners zero dollars.
The number of free font sites who take the latest dafont releases and post them on their own sites has dwindled to around a dozen. Not that long ago, a new Dafont release would spider out to over 50 sites now it's consistently less than 10 sites for the last 3 years.
1: Before I quote, I send a test font with 3-4 glyphs. The client suggests revisions, we go back and forth until the client is satisfied with the design. Occasionally I'll do a quick interpolation test so they client can decide how many weights they require. I find that it takes too long to write emails, hoping the client understands the terminology than it takes to make a few test glyphs. I think it's especially important to show the client exactly what you mean by italics. The difference in the amount of work involved in creating obliques vs. classical italics can add to the workload significantly so there can be no misunderstanding about that. While I'm making the test font, I'm getting an idea of how how the overall font will take so it serves two purposes. I occasionally give separate quotes including language options. For example, when a client has some interest in Greek and Cyrillic but it's not required for their project, they'll sometime request a quote.
2: I always stick to the price quote unless there are significant changes requested. Like adding Greek or more weights. I ask for a lump sum at the end. Since all my commissioned work is non-exclusive, I make it clear in the discussion that the work is to be non-exclusive. If the client decides to bail out, I end up with a font that I can sell...it's a risk I'm willing to bear. In the invoice, I like to keep the commissioning of the typeface and the licensing cost separate. That way, if the clients wants to extend the license, the discussion is simple. I never considered financing options. Clients always pay. Some slower than others but I've never been stiffed. Ah well... there was Typodermic's very first client. The company vanished without a trace. Only once in 20 years.
Horror story: Basically a brilliant art director was replaced by a terrible committee. In this case I had a detailed contract up front but that ended up being bad for me as I couldn't easily bail out of the project. If there weren't for that contract I would have absolutely quit.
Now that FontCreator supports both curve types, the only critical component that's might be missing is interpolation. Is that correct? I don't think it's capable of axial interpolation. An aspiring type designer will eventually get to a point where they want to get some interpolating done. At minimum, a single axis interpolation for weights.
Maybe that's where plugins and external tools could fill the gap. Are there any standalone Windows tools for this? I know about DTL BlendMaster but I don't know if you'd need another tool to get it into IK format first.
I think some glyphs are quirky and fun and others look plain and staid. If this were my project, I'd scrap the lowercase. The lowercase doesn't make a lick of sense. I like BDGKNRSTUZ. If you make the other letters match that style, you'll end up with an amusing version of a Federal Reserve Bank Note type of idea. The flip thing you're doing with the O isn't working. Q's tail doesn't have the same personality as the mustache stroke on the R. You need to spend more time on the 8...look at some examples of the style you're modeling this on for ideas.