It depends on who you ask. Some professional chefs prefer eating their steaks sizzling-hot, while many others prefer resting the steak before digging in. I prefer resting my steak for at least 5 minutes after cooking it. I find that my steaks come out juicier and more tender.
Please refer to any one of my "how to cook a steak" articles. You can find them under the "guides" or "beginners" section.
Unlike chicken meat, bacteria only live on the surface of steaks. A quick sear is all you need to ensure that your steak is perfectly safe to eat. Unfortunately, the reason why E. coli is such a health hazard in ground beef is because you mix surface contaminants into the center of the patty.
The easiest way is to measure the temperature of your cooking surface. I use a thermometer gun and look for 450-500F, at the very least. If you're using the right oil, you can also wait for it to start smoking. When you lay the steak onto your cooking surface, you should hear a crisp sizzling sound. If it doesn't sizzle (or just barely sizzles), your heat is too low.
Not if you eat it in moderation. The danger behind grilling steaks occurs when fat drips into the flame and combusts. This creates smoke filled with substances called “Polycyclic Aromatic Hydrocarbons”, which are carcinogenic. Thus, you should be fine as long as you cook over open flames for no more than 2-3 times a week.
The smoke point is the temperature at which oils begin to vaporize and emit fumes because of breakdown. The fumes aren't necessarily dangerous, and your oil isn't necessarily burning. However, it's a sign that the temperature is slowly rising towards the flash point of oil (the point of ignition). Regardless, you don't want to be smoked out of your own house. The higher the smoke point, the more you can do with the oil at high heats. That's all there is to it.