1 & 4. Dynamic Playlists is called Smartlists. They DO update with new music. If you base your playlists on static playlists, new music or videos will not be added of course. You'll have to use other criteria for your smartlists. Such as Rating above 3, genre = Rock or Electronica, Tempo above 130 etc, etc. Add a smartlist and try out the different options. You'll figure out how to make rather complicated smartlists in no time. Easies way would be to add smartlists based on directories. To be able to use smartlists fully you'll need to tag you're media correctly though. Examples are: genre, rating, tempo, intensity, style, actors. MC can try to update some of this for you, and there is lots of plugins and other apps that can update your tags.
2. I'm not sure of the freezes happens. It can be a faulty config of the video decoders. I would suggest you install CCCP for most video playback. It just work in most cases. When it comes to 1080P HD movies, yes, you'll might have to use CoreAVC. I've added CoreAVC many times after installing CCCP, and have had few problems. To configure the video stuff, go to Options -> File Types -> Matroska Video under Video (just an example) -> Set Other Filters as CoreAVC. Also try the source filters and different renderers to see if anything changes.
3. The thumbnail capture setting have been asked for several times. I support you that one. It's not THE most important feature, but it's quite annoying when MC crates thumbs for several seasons with the same dull black picture, credits etc.