This is 100% correct. Even studying in Taiwan during the CSB years, we used Wade Giles and Yale rather than TY. Locals don't know it. Foreigners don't know it. It's an uphill battle to teach it to anyone.
That is very incorrect. All academics who study China are very well acquainted with Wade-Giles. I wouldn't mind if Taiwan returned to WG, as long as people used it correctly -- let's not forget those apostrophes!
Yes but I don't think that's terribly relevant. People manage to go to Hong Kong and Macau, which largely use ad hoc Romanization for Cantonese, and they get around just fine. This is why I support either an established system (Hanyu preferably, WG as a distant second choice) or just switching to Taiwanese Romanization instead. (Plus other indigenous languages, to be decided by local residents; Miaoli for example would have street signs in Hakka romanization)
The counterargument is that serious Mandarin learners can read the street signs in Chinese characters, so the romanization isn't very important.
I fail to see how Zhuyin is a horror. It has lots of problems -- inaccurate phoneme mappings that are based on Northeast China pronunciation and still manage to get that somewhat wrong -- but it's just as functional as Japanese kana for learning and typing and looking things up. It's quite useless to Chinese language learners, but for locals it's doing fine.