1). Yes, the reaction can take place in a solvent with high boiling point, but it will significantly delay due to the dilution, as well due to the decrease of the overall polarity (polar reactions are favored in polar medium).
2). You are welcome.
3). Yes, it will remain as sodium naphthoxide, which is quite alkaline (salt of a strong base and a weak acid) and highly hygroscopic (inconvenient storage).
4). No, the mechanism is not correct:
a). In the transition state, the leaving arrow does not point to the leaving group, neither to a conjugative aromatic carbon.
b). There is a trivalent carbon, which is uncharged.
c). There is a negatively charged hydrogen that is already bonded with an oxygen.
d). There is a monocharged sulfurous anion, in the final step.
5). Aromatic nucleophilic substitutions have high activation energy and take place either under drastic conditions (e.g. high temperatures, benzyne formation, etc.) or in presence of R- groups that decrease the activation energy by extending the conjugation of the transition state.