No, under normal conditions the MAX isn't unstable. The instability comes only at high angles of attack (close to stalling) and only there the MCAS system should kick in. It was meant to be the equivalent to ESP systems in cars.
Yep. Except that the "exceptional" conditions under which the MCAS kicks in can also "occur" (=seem to occur) due to sensor failure.
Do we know, exactly, how much of the 737 Max 8's flight envelope was lost compared to earlier models? I'm getting the feeling that the instability happens far closer to the regular maneuvering envelope than is being alluded to in the press.