2. Will my theme on Our Locality be full site editing enabled?
No. You will need to enable a new template. When 5.9 is released we will progressively roll out new templates with FSE support. In other words a new template will be necessary to get full site editing benefits.
4. Will I need to upgrade my theme?
Not unless you want to use FSE. If you want to use blocks and explore the layout manager, a block based theme would allow you to rejuvenate your web presence without FSE-support.
5. My site is quite old should I upgrade?
If your site is more than 5 years old, you may want to consider a new theme. Right now only a few FSE themes that are enabled, but there are plenty that offer block-support. It is our opinion that FSE is a beta product and as such working, but still very much experimental and a work in progress.