Answers to your questions:
1, 2, and 3: Simply put, I would create an info product in a niche if I don’t see any existing products that are of high quality. That’s what I did in all of the niches I created products in (in niches ranging from goat farming to sleep apnea to government grants for home improvement).
Having said that, you can make money by creating your own info product even in niches where there are existing high-quality products, IF you can find advertising channels (e.g. Google Display Network) where those existing products are not being promoted.
4: The answer to this question would take several courses to cover!
I’ve never used Twitter to promote products, largely because I haven’t worked in any niches that seemed suitable for Twitter (e.g. the “make money online” niche, etc.).
I’ve used Facebook a bit, and in my experience the key to a profitable campaign is (a) good targeting (i.e. you must match your offer with the right FB audience), and (b) the images you use in your ads (only certain images will get a good clickthrough rate).
I’ve used Google Adwords *a lot* – particularly Google Display Network – and the key to a profitable campaign is finding the right “placements” (i.e. specific web pages on the Display Network).
The bottom line with paid traffic is this: you have to test everything (keywords, ads, landing pages, and offers) until you find a winner. It takes a lot of patience, and a budget.
5: It’s not true that you’re not allowed to promote affiliate offers directly on Adwords – that’s a common misconception. Having said that, I would never try to directly promote an affiliate offer on Adwords’ search network, and would be very careful about the offers I tried to promote on the display network (because promoting an offer that violates any of Adwords’ policies could get your account suspended or banned).
The best approach when promoting a product on Adwords is to use the display network (GDN), not the search network, and send traffic to a landing page. I’ve almost exclusively sent my GDN traffic to a squeeze page (i.e. an email opt-in page), and it’s worked out well for me.
An absolutely awesome blog to learn what’s working *now* on GDN is the Adbeat.com blog: https://www.adbeat.com/blog/ . The owner of Adbeat.com (Mike Colella) is a GDN genius. The last time I talked to Mike, he was spending $50k a week sending GDN traffic to his own offers, and doing very well.