RAW, 1&2.
I allow defensive casting, since it still eats away character resources. It works like so:
After the attack roll, but before the player rolls defense, they can decide to use a spell to defend. They cast the spell normally. The defensive spell only applies to a single attack. This duration cannot be extended.
So spending an action on a block is still better because you can apply it to all attacks that turn, and extend it if you'd like.
5 is possible, but I'd require that it only works in pretty specific circumstances. They shouldn't be able to use Discipline in place of athletics against every attack. (Maybe only ranged attacks, maybe only after having cast a spell that turn, maybe only melee attacks, maybe only against a single opponent each turn, etc).