Yes, but AFAIK the API isn't complete there - i.e. not all hooks are exposed as they are to Vimscript, which explains why with Python "scripting" being around for a while people still write Vimscript.
No, that's FUD. There is nothing wrong with the API exposed to Python. The main reason to write things in VimL is that this means no dependencies outside vim, which might be easier on users of your plugin. But a number of major plugins are written in Python with no problems. It's quite usable.
Which dependencies are needed to run Python plugins?
Your vim needs to be compiled with python support.