Hi
Yes, thats how Cryptomator works. see here: https://www.youtube.com/watch?v=g9A0zihHZ14&t=16s
Question 1:
Everything you copy/move into the vault is encrypted automatically on your device. As soon as you copy/move it outside your vault (including email attachment), it will be decrypted also automatically.
Question 3:
Yes, everything you put into your vault (the virtual drive) will be encrypted.
Question 4:
Cryptomator desktop does the encryption and generates the encrypted vault files on your local machine. It does not the sync. The sync is done by your sync-client (in your case the onedrive app). So as long as your vault (the encrypted vault files) are somewhere in your onedrive folder, then yes, they will be synced by your sync client. And yes, these encrypted vault file will take space on your local drive. The encrypted files will (nearly) have the same file size as the unencrypted version of the files. To avoid storage consumption, you can configure your onedrive client to free up space if files are not needed for a while. This works with encrypted vault files also. (Files on demand feature by onedrive)
Question 5:
If you are referring to the versioning of onedrive: no this will not work anymore because onedrive will not know the content of your files.
Question 6: There is no best practice. Just move the files you want to encrypt into your vault. Thats all.
PS: Dont forget to make your backups. No matter if you are using encrpytion software or not.