1. weight is the least important of all factors really, anything from 18-25 lbs will be fine. Too light and you sacrifice durability.
2. buy the complete one, saves you the most time and money. Only build if you need specific list of components for whatever reason.
3. Yeah, craigslist is fine, you should know how to inspect a bike. Bring a bike-shop friend along if you don't know what to look for.
4. easy fit method is to stand over the bike and straddle the top-tube. Feet flat on the ground and lift the bike up evenly. Should have 0.5-1.0" clearance before the top-tube touches your crotch.
5. Depends upon your inseam measurement. That height would typically ride a 55-56cm frame.
6. Yeah, you can get darn good used bikes for $100-400 from Craigslist, thrift stores or garage sales. Ex racing-bikes with nice high-end componentry and decent frames too and they're typically only 3-5 years old in that price range.