Kit comes with hole saw and pilot bit, that's all you'll need to make the hole
No, tried on some Chicago stucco and the blade started falling apart at the welded seem.
check recommended size hole by manufacture of the canned recess lighting
No, I don't believe this will drill through stone, much less 12" of it. It is made for sheetrock.
No. You want to use either a bi-metal or carbide tipped hole saw for aluminum.
Yes, this will cut through wood to a depth of 1.5 inches.