1- If the head gasket is bad I wouldn't pay more than $1000 depending on condition. I would have a Pre Purchase inspection done to make sure you're not buying a pile of crap.
2- Yes, might as well do everything while you're in there.
3- No, but it would be very unwise to have the head in your hands and not have it checked and resurfaced.
The entire cooling system needs to be replaced no matter what. I think Bimmerworld sells a kit. Pump, thermostat, radiator, hoses, coolant.