New questions woo!
1) Villagers can attack, just like all other units they will get better at attacking and defending when they gain levels. Not saying that you should count on your Level 10 army of peasants to carry out a battle for you, but they can definately help when your fortress is breached.
2) You can repair your walls, however they will "heal over time" because villagers will automatically be tasked to begin repairs on them when damage is noticed.
3) You can trade resources between players.
4) Humans can build boiling oil pots on their walls. Each race will have different options for wall defenses.