1. When casting an offensive spell, how do shifts beyond the spell's original power level count? I.e. if I cast a 4 shift fireball spell and get a result of 7 on my roll+skill+foci bonus, does the fireball count as a Weapon:4 or a Weapon:7? Does the target roll to defend against a difficulty of 4 or a difficulty of 7? Do I add the difference between my roll and the target's roll to the stress caused by the attack?
When casting an attack spell, the roll actually does 2 things: It serves as an attack roll and it serves to determine how much power you can control.
You start out by declaring how many shifts of power you want to summon for your attack. That will be your weapon rating for the spell. If you say 4, it's a weapon:4 spell, if you say 7, it's a weapon:7 spell. For the example, let's stick with the 4 shifts.
Then you roll your dice. You roll a 7, which is more than 4 shifts, so you control the power and the spell doesn't change.
Your attack roll was 7, so your opponent has to defend against a 7 shift weapon:4 attack.
Let's switch it up. This time, you decide to do a 7 shift spell, but only roll a 4.
First we need to look at the power again. You lack 3 shifts, which you have to make up somehow. The options are: invoke enough aspects to boost your roll, take backlash or release the energy as fallout.
Invoking an aspect is easy, either free tags or spending Fate points will do, and the result of your roll increases. If you get enough shifts to completely control your spell, proceed as usual.
Backlash means that you take the difference between your roll and the power your wanted to summon as stress and the spell goes of as normal. So in this case, you'd have to take 3 shifts of stress (mental or physical, your choice). You can also take consequences, to lower the amount, just as with any stress you take.
Fallout means you can't control the excess energy you summoned and it flies around. It is encouraged to think of a way to do so that would be somewhat detrimental to the caster. If you choose this option, the power of the spell is reduced, so in this case your weapon:7 spell would only be a weapon:4 attack.
Your opponent would have to defend against a 4 shift attack in both cases of backlash or fallout, since that's what you rolled. In the case of backlash, it would be a weapon:7 attack, in the case of fallout, it would only be a weapon:4 attack.
2. As I understand it, you can't create a Focus Item with more + bonuses than your Lore rating. You also can't create an Enchanted Item with a greater effect than your Lore rating. Is this a blanket rule? Or can you use extra item slots to increase a bonus rating on Focus Items beyond Lore and an effect on Enchanted Items greater than Lore?
The base effect of an enchanted item is equal to your lore. You can add enchanted item slots to increase that number by 1 per item slot, but you may not exceed double your lore. You may also add an enchanted item slot to an item to increase the number of uses by 2. You may not have more enchanted item slots on an item than your lore skill. All this can be found in Your Story page 280.
3. And one last question on thresholds. Would you consider the abandoned ghost house in the Night Fears case file from Evil Hat to have one? Or has it been abandoned so long that the threshold has died away?
If nobody lives there, there's nobody to keep up the threshold. Or rather if nobody makes it a home, there is no threshold. People crashing in a ruin or occupying a place might not be enough to actually make it a home with a threshold.