From the last update notes:
- Daze and Paralysis remove the overwatch status from a target, as well as the ability to return fire.
- Panic removes return fire, overwatch, and mind control
If one can destroy weapon or weapon arm, this will stop return fire. If one doesn’t want to chance return fire, setup overwatch instead.
As to #3, there seems to be some info, but how accurate it currently is, is unknown. Soldier experince gain