Items only, as it says in the text. So this excludes abilities and talents.
There are base stats and bonus stats. Bonus stats are the ones gained from items, masteries and runes.
Yes, increases damage from all sources, be it activated items, ignite, pets, any damage that's dealt by you.
The added defense is most definately worth it. In the case of tanky supports I usually get 1/11/18, 1/15/14, 1/16/13 or some combination. This is always subject to change depending on the enemy though. With the changes to MS filling up */*/21 gives more than enough move speed to be able to go while out boots for most of the early game. Especially on supports with high movement speeds, move speed buffs, or if you've chosen to take MS quints.
Experiment when you have time, and do what feels best to you.