#1 - Depends on the wind, if the wind is down (happens) or from the backside (not often) they can be a pain but mainly at sundown, plain old OFF usually works fine. Malaria is not an issue on the island only if you will be spending time at one of the more remote jungle lodges.
#2 - I doubt it, they are on town water, it will smell like chlorine. Only those on wells smell like sulfur.
#3 - It's all in San Pedro.