Using Office 2011 with Office 365

I have been unsuccessful with importing data into the Outlook app for Office 365.

I have now decided to set up my current Office for Mac apps with Office 365 for business but have some questions that need answering, as I do not want to do this seamlessly.

1. Our current email is with an Exchange hosting provider. Will setting up the new email account in Outlook 2011 cause a loss of emails?
2. Do I need to move over the public folders that have our contacts in them? If yes how do I do that?
3. Once I have set this up will it solve problems with importing data into the Outlook app? I get the error message that "the data contains an Exchange 201 Sp1 or older account.
4. Will the above error make it impossible to use Outlook 2011?
5. Will this work seamlessly on the iPhone? Is all I need to do is set up a new exchange email account?

Thanks.