Welcome Kamikazegerbil! I show this is your first post.
With the Incite Emotion power, the text reads that it allows you to incite certain strong emotions in a target, usually emotions of passion or pain. Dark or morally "corrupt" emotions are the usual ones available. Since it says "usually", I'll take that to mean that we can play around a bit.
Keep in mind, this is just my interpretation of the rules and how I would run it in my own game. Now let me get to answering the numbers.
1. To be perfectly fair, unless you're rules lawyering as a player, what will and will not be allowed always falls down the GM. Still, if you don't follow the framework of the rules, what are you playing the game for? With the Incite Emotion ability, I think you could lift someone's spirits and with the At Range boost their mood without touching them (which they could tag for free once since it is a newly created temporary aspect). Using it as an attack I would rule that you would need the Lasting Emotion upgrade and even then, making them manically happy doesn't necessarily mean they are manically happy with you. Haven't you ever just beaten the crap out of something just for the sheer joy of it and the more you hit it, the happier it makes you? Maybe I'm telling a little too much about myself though. Keep in mind, these aren't True emotions by the Rules As Written (or RAW). Just fake emotions... kind of like drugs. But still, fake can help sometimes, right?
2. Since neither Incite Despair or Incite Joy are true emotions, the person affected will need to take a little time and remember either how great or how crappy their lives are. I couldn't see it specifically countering other powers unless they tag the Fake Joy aspect to resist the Incite Despair attack.
3. Since this isn't true joy, I would almost treat this like a drug. It can make you feel good and want to feel good more. Maybe it makes them associate things with that joy (kind of like how I like punching things). The brain is a very complex thing and meddling with it always changes things. Ever hear of the phrase "the road to Hell is paved with good intentions"? I mean it that way. Even though you're giving them joy, that doesn't mean that it won't hurt them.