Hey Vincent,
I believe the reason that nobody responds to this question is not that the people don't know how Engagement Programs work, but rather that nobody uses the "Test Stream" function. To be honest, I wasn't even aware it existed.
Therefore I can't answer any of your questions, but here's what I would do: Just setup your Engagement Program like you normally would, and yes, don't use Transition Rules, but Smart Campaigns instead, activate your program and send a test person into it. You might need to wait as long as your transitions and schedules take, but I don't see any other way to test an Engagement Program.
To your questions 4 and 5: Yes, the test lead must be an Engagement Program member and yes, they fall under the restrictions of the Communication Limit.
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