1)To use it in custom/historical battles, you need to go in each of the battles' folders(they are located either in world\maps\custom\battle\ or world\maps\battle\custom) and edit descr_battle.txt(at the very end, add the two lines), but note that historical battles already have a script, so you must edit their current script and add some parts of the StartupScript.txt in them(the monitor_event and what comes after I think) ).
2)Aye, it only applies to the battles actually and not the campaign map. As I mentionned above, descr_battle.txt is only found in historical/custom battles.
3)Yes, when you press the pause button, it sets the camera to such an angle/position that the camera limits do not apply anymore so you can play normally with no camera limits. If the camera goes back to normal limits, you'll have to use pause again(it happens sometimes).