To your questions:
1) Definitely no degradation of sound, just some slight effect on battery life. I personally think it sounds little bit better with high gain, so that's what I use on my players.
2) EQ works as good as is possible on current HiBy software, nothing much we can do with it. Some people say it has small effect, some says it works as they want.
3) Can I ask what headphones / IEMs are you using with M2s? What player you were using before? I think most people takes M2s as quite warm player already.
4) Here you have explanation of filters directly from AKM. To me personally Short delay slow does the opposite, making sound most energetic and most neutral.
5) High gain has no effect on EQ.