All correct.
Your assumption on first point is valid, i too consider It correct. It will still be Advisable to upgrade your unit productions to a sufficient level as while you may have a good army after the upgrade you may nit be able to maintain it without a good economy.
For the second point, you are correct, Upgrades and Purchasing of manpower by gold is Judicious use of your resources (here, gold) at hand. Other functions do not require gold per se.
As for the third point it is how it is supposed to work. Tho it will be preferable to have a Moderately large reserve at hand always in every type of scenario regardless of Allies. Though, in Alliance games it is not much of a problem.
