1) The mechanism, glancing at it, makes sense for a conjugate addition to me.
2) Indeed, which would be my primary question. Grignards typically are hard nucleophiles and tend to add 1,2 instead of 1,4. Also, there should be any steric problem, because the grignard would attack the carbonyl from the above, and the whole molecule is planar.
3) It's hard to say, given this question, I would have predicted the grignard attacking the carbonyl.