The only thing I can think of is that, practically speaking, you are never going to be exactly on track, and so yes: the further out from the NDB you are, the less needle deflection will be for any given track error.
Correct, most of the time.
In practice, the accuracy and errors of the NDB, ADF and turbulence will make the theory imeasurable.
Even more correct!
In general, the head of the needle will tend to move from top to bottom.
In general, you will not know precisely whether you're on track or not - but you should
generally have a fair idea of a heading which will reduce the track error, such as it is.
I second the remark above, that drift angle is a fixed correction to apply. With wind, the tail will not end up at twelve o'clock.
A lack of simplicity in what were taught, and how we see it is exactly why everyone screws up the NDB in flight and in tests.
Actually, I think it is a result of focussing too much on tolerances and not enough on technique. Spend most of the time looking at the AH, some reasonable time stopping trends on the Alt or ASI or DI, and adjust heading
in the correct direction to reduce the track error. That will take care of about 90% of flight test fails, right there.