(1) Yes they are fairly common
(2) Most of it goes on in clubs that have very strict safety rules, there's also a national association (UKRA) which provides insurance, range control qualifications, training, etc.
(3) Yes, launches of anything that big are Notamed. I live on the South coast and have seen quite a few Notams for the IOW rocketry club.
(4) You can reasonably assume that the big ones can go higher than you can.
(5) Only if you don't follow the Notams, or some maverick rocketeer doesn't obey the safety rules.
Some good links are
http://www.mars.org.uk/ ,
http://www.gbnet.net/orgs/staar/staar.html ,
http://users.charity.vfree.com/A/AspireSpace/index.html
I should admit to knowing a lot of Rocketeers, although I ducked out of the serious stuff a few years ago and only make a few squibs to impress the children. However, the majority of rocketeers are professional engineers and scientists using their skills (and professionalism) for their own interests - apart from one individual who I shan't name out of respect for Chief Pilots rules (but can be seen in the press more than the rest put together) they are very safe and very professional.
G