1) Is it an upgrade? Yes and No. It's an upgrade in that you get more inputs and outputs, plus analog inputs and outputs, and faster max frequency. But it probably won't have any effect on your machine's performance.
2) No. The license is tied to the controller's serial number. Each controller needs it's own software license.
3) Unless you plan on wiring you're drives and switches directly to a ribbon cable, you need to use at least one breakout board with the UC300. It has 5 ports on it, so you could use up to 5 single port breakout boards. I use a 3 port breakout board with my UC300ETH, plus a simple DB16 breakout board for the analog inputs.
A breakout board doesn't really "improve performance", but it can add features. My breakout board has relays, speed control, and 24V inputs and outputs.
4) The UC300ETH is a better choice for servos, because of it's higher max frequency.