1. I wouldn't trust the precision too much, I consider a +/- 5% reading to be indistinguishable from each other.
2. very posible, post a training and diet log, eh?
3. Fat is constant and you loose or gain it slowly over time. However, muscle is ALWAYS being broken down and rebuilt. A net loss of muscle-mass then means that you've been losing it faster than you're rebuilding.
4. Don't worry about HR-zones, they all burn fat and the higher ones actually burn more fat in absolute calories/hr amounts than the lower ones. It just happens that 30% looks smaller than 45%, but 30% of 600 calories/hr still burns more fat than 45% of 350 cal/hr (180 cal/hr of fat vs. 158 cal/hr).
If you're looking to burn fat, there's no way around burning as many calories per day as possible. That means you need to do at least one 2.5-3.0 hr LSD/endurance ride per week, two if possible. It's really the 3rd hour of these rides that really burn off the fat and you want to do them as fast as you can hold at a steady pace the entire time. That's why people typically say you have to ride slower for endurance rides, it's not because of the fat-burning, it's because you want be able to at least FINISH the 3-hr ride. So pick a brisk pace you can hold the entire time for the 3-hour ride. Even if you have to slow down to 10mph, do 3-hours minimum.
Then nutrition is a big deal with fitness improvements and recovery. You NEED sufficient carb-calories starting at 1.5-2.0 hour into the ride or else you'll get close to bonking and will end up eating muscle for fuel. Same with recovery after the ride, if you don't eat sufficient carbs to replenish your glycogen stores, your body will take apart perfectly good muscle to convert to glucose then glycogen.
Some articles about nutrition and muscle-building. Note these are
bodybuilders and notice the ratios of their nutrition:
Bodybuilding.com - Anabolic Ammunition Arsenal (look about 3/4 down page for calorie-mix calculator)
ABCbodybuilding - A Scientific Investigation into the Rationality of Post Workout Carbohydrate Consumption
ABCbodybuilding - Analysis of Nutrient use during Low, Moderate, and High Intensity Exercise
SparkNotes - Functions of Carbohydrates
Peak Performance - How much protein do athletes need? note "up to 150gm a day" for performance athletes.