Expanding Digital and Analog I/O of ATmega

Hello, i want to expand the digital inputs and outputs of the atmega328 microcontroller using the 74HC595N shift register.

1st question: I just read that "This integrated circuit is inherently digital, like the digital pins on the Arduino
it means that they can only read or write HIGH or LOW logic levels, they should not be used
to read data from analog sensors or potentiometers."
Is that true? Can i use ultrasonic sensors or linear pots?

2nd question: A single 74HC595N can provide you either 8 digital inputs or 8 digital outputs?

3rd question: Is there a limit in the number of digital and analog I/O I can have?

4th question: Does anyone knows any better way to expand digital and analog I/O ?

Transforming your UNO into a Arduino Mega 2560 will give you 54 digital input/output pins (of which 14 can be used as PWM outputs), 16 analog inputs, 4 UARTs (hardware serial ports), a 16 MHz crystal oscillator, a USB connection, a power jack, an ICSP header, and a reset button with a lot less time, expense and kludge.

1st question: Can i use ultrasonic sensors or linear pots? No.

2nd question: 74HC595N is serial in/parallel out

3rd question: Is there a limit? Of course, several different kinds: delay time, board space, processor speed, $$, etc.

4th question: Better is subjective. There are I2C digital I/O expanders and you can multiplex analog signals under processor control.

Is this just an intellectual exercise?

To example analog pins takes one or more analog switch/multiplexer chips, such as 74HC4051

So, I am still confused. The 74HC595 shift register provides only digital outputs? If so can I connect just the trigger pins of some HC-SR04 and the echo pins to arduino's digital pins?