1) Sure at the moment, and it will be difficult to match economies of scale with the oil industry, but the amount of research money going into hydrogen production at scale is enormous. It's only getting cheaper, and while 'The Hydrogen Economy' has been promised since the 70s and hasn't yet arrived, it's definitely coming. I'm sort of thinking about this debate in a 10+ years out sense rather than right now, I admit.
2&3. Sure, but that only becomes a smaller problem as rockets get bigger (i.e. very heavy launchers such as this one being proposed) and the cube/square law works in your favour (i.e. tank volume increases faster than frontal area to which the drag is proportional). T/W is often limited anyway by payload constraints rather than rocket engineering constraints, especially in manned systems. Doesn't matter if the vehicle can do 5G off the tower, the people inside it can't.
4) 'Embrittels' I would guess? Anyway, it occurs in most metals but certainly not all metals and very certainly not "everything it touches". This is the clue for the way out of this problem. I obviously couldn't show you a hydrogen engine with the same track record as no operational hydrogen oxygen engines have been built with a clean sheet using what we know today. That said, a few are being designed precisely as we speak for very long life operation in reusable vehicles. I don't think the chickens have come in to roost yet.