Hmmm ... I don't know if you're immune to trade embargoes if you are 18+ rank with every faction. You are still penalized by the faction that you have traded against.
Re free version - yes, your enemy captains are certainly capped at a particular level. However, if you import those captains into Elite, you'll be launched in at the correct level for your difficulty and turn count. That means, you might have spent 10,000 turns with enemies at level 23, but when you import the captain, he will face enemies many many levels higher.
No. If there is a trade embargo between for example Steel songs and Cadars and you have 18+ rank with Cadars, then you can trade with steel songs at will. Your military rank protects you from any penalties.
This is correct. I can't verify that 18 is the rank you need, but I do know that if you have a high enough rank you get a toast that says something like "You have violated the trade ban of [Faction], but your military rank protected you from the consequences." I think this protection also applies to the single urban-zone trade ban rumor.
No, single zone trade bans still get penalized. But their reputation drop is so low that it is almost insignificant For example after trading 24 electronics I caught a penalty of - 4 without a significant rank or relations.
I see... I think I read somewhere that you need at least rank or death warrant to get extra xp from spy and solar wars. Well, maybe not if you say it I also have another advice... If you want to live by merchandise and have huge profits, don't buy every faction's ranks, since they cut the sale price as well as buy price tremendously or maybe buy like five out of six to still be able to sell electronics and artifacts with some nice profit. Also, no need to have more than 20 negotiation as a merchant, since the prices can't go too further down... And actually with 20 negotiation you can even profit from selling to independent planets if you buy stuff from rank 18+