3/4 in. Plastic Water Pressure Test Gauge

Yes it is. It will attach to the spigot (faucet) the same as the hose does. It will attach to the end of the hose as well. I will sometimes put a "Y" on at the faucet to hook the gauge and a hose on at the same time.

The gauge just attaches to the faucet and then you turn the faucet on. It will sweep the red needle with the black needle and it will stay at the highest reading so you can leave it on for a while and then go back and look at it and see if there was any spike in the pressure. you can re-set the red needle back to the black needle by turning the brass knob in the middle of the gauge counter clockwise until the needles are back together.

Yes you can. The gauge itself is 1/4 national pipe thread and the fitting it screws into is set to screw onto a faucet.

The gauge is on a swivel, so you line up where you want it to face then tighten the collar

If you have not taken over the maximum pressure for this gauge and have disconnected it from the spigot, I would say it was defective. If it showed 20 lbs when brand new, it was definitely defective.

No it is not normal, return to where you purchased it at.

It's about 2-1/2"

Yes, indirectly, but definitely can be used to indicate possible leak(s). Attach gauge, read pressure, turn off supply, watch for a pressure drop on gauge. If pressure drops, water is likely 'leaking' somewhere. Finding the reason might take some investigating. The smaller the leak the longer it may take for the gauge to show a pressure drop. Small leaks can be difficult to find. Can be an internal leak; toilet, washing machine. Hot water heater or boiler can leak small amounts inside that might not show as they evaporate due to heat. Piping, fittings, might 'leak' inside walls. etc. Supply lines to sinks can leak inside and under cabinets. Leaks can be hidden in walls, ceilings, floors, etc. There can also be leaking components in systems with wells that can allow pressure to leak back into well without any visible 'leaking water.' Finding the cause for the gauge pressure drop can require extensive investigating but this gauge can certainly be useful in detecting pressure drops indicating a 'leak,' in all the many ways leaks can exist.

It very well may. The cardboard backing in the blister pack states: "This product contains chemicals known to the State of California to cause cancer and birth defects or other reproductive harm."

You could take the gauge apart by removing the two screws on the back side and pulling the metal cover off. You might then be able to wind some fine wire between the red needle and the plastic cover. That could provide some resistance against moving the red needle so easily.