No reason it should not work, would need to see the details of what the person was doing to understand why it failed.
No reason I can think of that you would need pullup/pull-down resistors on an unused pin. That usually only matters if an input you are using is left floating.
Sounds like it would work, but at that point you basically have a nano.
Is there a specific reason you need all the boards hooked up to USB? That is a very unusual configuration when running this many atmega328's.