I vaguely recall this, but can't find the exact post on the subject. To clarify, the thought was that if someone cast a Fireball, in theory, someone with Change Fire should be able to modify the spell to become Fireflies before it hits. But like I said, I'm assuming you'd have to create a new modification spell for each and every base. There wouldn't be a catch-all (I think that's where a base "Magic" would come in).
No, not really. A Fireball has an Instant duration, but cast times (which we've ignored so far) are generally larger than Instant. Casting your counter would take longer than it takes for the Fireball to hit.
There's no rule there yet, because that's going to be part of the Magic Duel rules, but basically, casting isn't instant, and you can't just throw 3, 4, 5 spells at someone without them being able to also cast something in your general direction.
