1. Any Linux would probably run on it. They all use the same kernel after all, but a lightweight distro would boot quicker and you wouldn't sacrifice much if you used one. I prefer Kubuntu, which isn't lightweight, as I know it fairly well and it's highly configurable. I put it on a friend's laptop recently and we are both pretty impressed with it. I don't change distro much, unlike some here

who would be able to make suggestions of a lighter one.
2. Yes, the installation procedure should give you the option to erase everything and use the entire drive, but if you can figure your way round the manual partitioning option, then you could make a partition for the other OS ready for dual booting. You'd need three partitions really, but if you go with the first way I mentioned you can probably reduce the size of the main partition later...
3. When you install the second Linux, any good modern installer will find the previous install and ask how to proceed. Easy if you already have a spare partition, but either way the last thing the installer does is run a thing called Grub which detects all the runnable operating systems on all the fixed drives and generates a boot option screen, which you'll see each time you boot the lappy.
All Linux distros like a bit of hard drive space for swapping chunks of memory out somewhere when it's very busy. It'll probably want 2GB in your case, which is fine.
Hope it helps.
Probably should mention that you should have it on the charger during any installation. There will be a lot of updating after and during a successful install, so best keep it plugged in the network as well. Your keyboard is probably 'UK plus extended Win keys' or some such description.