Well lets try this one question at a time. I would use a ready to use spackling compound with a putty knife. Be sure to let it dry and then lightly sand it with fine sandpaper. As far as damage to drywalls if it is not a very large place just spackle it. If it is a large place, then cut out a square where the damage is and replace it with a new piece of drywall, tape and spackle it. You can use a sealer if you desire. Color scheme is totally up to you. You might go to a home improvement store and see what they recommend and then compare. I would use the paint that can be washed, specially if you have young children. Its much easier to wash something off than repainting it. If the windows match the paint scheme, leave them alone; if they dont then paint them. Just be sure not to get paint in the runners of the window and don’t paint your windows so it seals them closed. Good Luck.

drywall repair product-be aware some r too hard to sand down if u overfill
yes
depends on ur taste-take a color sample and hold it next to ur cran/cream colors
latex
I like natural finishes