1st query: right. Levels deep down will have no effect on the electrical conduction.
4th query: All solids have abundance of electrons but for most, they are not available for conduction. For metals, electrons at the top of the Fermi level are available for conduction (at non zero temperature). Because the conduction band overlaps with the valence band, even a small potential is sufficient for conduction. External potential (electric field) does distort both conduction and valence bands. For metals, both electrons and holes conduct (approx) equally. Your second part (Quasi level will go down in energy whether its on p side or n side, why?) applies for pn junction and not for a homogeneous metal. The exact nature of the change depends on the crystal structure, electron density (search Fermi surface of Copper, Gold or any other metal) etc. In general, the band will be split and the splitting depends on the electric field strength.
5th query: a pn junction is made in the same crystal but different impurity bands in different parts. The impurity bands are therefore localized (say p type on the left and n type on the right of a semiconductor rod). Assume the junction to be sharp (for discussion purposes). Because the impurity bands are localized, there will be majority carriers and minority carriers (of opposite types on either side). At the junction, there will be some holes and electrons recombination and that will a potential difference. ----( I do not follow this sentence)
On the p-type side, there will be negative charge and on the n-type side there will be a positive charge. This makes an electric field that causes the bands to distort and merge in a continuous curve (the distortion will be only near the junction). The potential will prevent further diffusion and recombination of electrons and holes. This is a steady state in absence of external potentials.
When you add an external potential what happens? It is simple to consider the junction as a capacitor (this is a real effect because a very thin layer at the junction is devoid of majority carriers- they have recombined). You add +v to the p-side, the junction is having -ve charge on that side. The electrons are taken away and the junction potential decreases and that helps more diffusion of electrons and holes. Same thing happens to the -ve added to the n-side. Basically you are trying to reduce the junction potential but this causes flow of majority carriers on both sides.
[I follow the explanation for the 1st and 4th query. Thank you !! now for the 5th one, correct me if I am wrong. When we F.B. the PN junction, the positive bias on p side will attract the electrons. Since the P region is depleted of free electrons, the Fermi level on P side has to go down because fermi level represents the maximum filled energy state. Did I get this right ? ]