Dave,
In response to your questions,
1. TCAS identifies a 3-dimensional piece of airspace around your aircraft where a possibility of traffic conflict exists. The size of this bit of airspace depends on the rate of closure of any conflicting aircraft. A Resolution Advisory (RA), (the highest level alert) indicates that TCAS has calculated that another aircraft will enter the conlict airspace within approx. 20-30 seconds.
2. I've never got that close to another aircraft in flight, and hopefully never will, so can't give an answer to that, however a change of underwear would probably be required on both flight decks!
Cheers!