1. Yes. Right-click an empty area of the menu, choose Set Menu Background, and browse for your file. To loop it, go to the End Action tab of the Menu Page Properties window, and set it to Loop (instead of Hold).
2. No templates (if you mean DVDA themes) with video backgrounds, but they have a few lone video backgrounds you can download.
3. Menus are limited by size, not time. The total space allowed for menus is 1GB. At the default bitrate, that's about 20 minutes.