(1) if by opposite charge you mean (-), it only neutralizes the charge of the previously positive object if it is a large enough earth, and if both bodies are good conductors. if it is not a large enough earth, then the charges will be equalized between the two bodies, rather than for the positive body itself. if one body is not a good conductor, the charges cannot flow freely and nothing much happens.
and yes, electrons are carriers of charge, so the electrons have to come from the other body. i suppose that ions are not considered in the context of the question as they are too big.
from a macroscopical viewpoint, only net charge matters - in a metal, ions flow in a sea of electrons so it is hard to tell if a single atom is charged because it lost electrons to the other object, or because its electron is just mobile. microscopically speaking, yes.
no idea what you mean by 'line' - perhaps that of their center of mass?
(2) depends on how 'small' is 'lightly charged' - sometimes you can see a spark between a doorknob and your hand, feel the 'shock' on a rubbed balloon, sometimes you cannot. they display effects, but whether it is detectable by human eye is in doubt
(3) charges are unable to move freely - only surface charges are traded between the two objects - the rest of the charge deep inside cannot move to equalize the net charge on the two objects