1) You don't have to have it in your house. It is very free form. After you have been matched up to your 5 strangers, you are shown a communications box, where you communicate with them as a host, on where and when you want to have the dinner party. It can be a lunch, it can be brekkie at the top of the hill, or it can even be a night out at the pub. That's where you describe it in the party description.
2. Not knowing where to go? That's a usability problem and it's our onus to fix it. We'll do that. The flash message that says your dinner party has been saved is clearly not doing enough. We WILL fix it.
3. Yes it is fully functional. You might get an email IF within your vicinty there are more than 10 people.
4. Couples. That's what the Plus One button is for. When you get a list of people to rank, you'll be notified if the potential attendee is bringing a Plus One.