To answer your questions in order:
1) No. They are primarily for looks. If you change the mufflers to a straight thru design (Flowmaster, MagnaFlow, etc.) you might gain 1-2 ponies at the top end.
2) Yes. You will need the additional hanger for the right rear.
3) Yes. (refer to #2) The Gen 4 Taurus uses a larger diameter exhaust pipe than the Gen 3. Gen 3 = 2" Gen 4 = 2.25"
If I were going to do this, I would use the 98's quasi duals and cut the exhaust about 3-6" before the rear split. Then remove the Gen 4's and line the two up on the floor with one on top of the other. Cut the Gen 4's exhaust at the same location as the Gen 3's. Use an exhaust reducer to connect the Gen 4 to the Gen 3's rear duals and use clamps to hold it in place. Once the entire assembly is mounted to the car, loosen the clamps and line up the rear duals so they hang correctly and evenly.
AFAIK the Gen 4 has the bolt hole for the right rear hanger. You can use the hanger from the Gen 3 and bolt it in place. The left and right hangers are the same part.
With the diameter reduction so far back in the system and just before the split, there will not be any detrimental effect on power. Replacing the stock mufflers with a performance muffler would help.