Hiya Machnix
1. yes, there are limits due to framerates. They are more practical limits than physical limits. I can't give you a specific number (becasue the TE is so new that we just don't know yet) but I can tell you that a terrain will be rejected if the clouds reach that limit.
2. Arena settings for online play are set on the server; no need for you to supply them.
3. Zip up the entire folder for that Terrain and e-mail it to Skuzzy. He's a busy man, so give him lots of time to get to it.