You can use it for free, without limit as long as you keep ads and captcha.
No. Nothing going in or out of SpinBot is saved.
The per-spin limit is actually not based on words, but on total spaces and letters (keyboard characters). This limit is 10,000 characters per spin, which is about 1000 words (or an average length essay).
Yes, but only for extreme cases. This limitation is in place to avoid abuse.