Hope this answers your questions:
1) The entire game jam will be over the duration of the 4 days. You can use as much of the time as you want, however you want :)
2) As noted in the rules, you can use any external assets or resources. If you're working with someone else, just make sure you note that the game is a team project in your description when you upload it :)
3) Yes, but using 3D models and animations will probably be a bit too ambitious, unless you have a good amount of experience and are confident you can incorporate them within such a short time.
4) The winner wins : ] (the idea is to keep things fairly low pressure - the challenge is its own reward :D)