The roofing under the California framing (also called an overframe) does not need to be removed but it would be better to get rid of it.
I might be misunderstanding question # 2- so this is what I think you are asking- You want to cut out a section of the existing roofing so that your California framing sits onto the existing roof sheeting rather than on the shingles and you want to know how much of the old roofing to remove. This will depend on your roof pitch. I am going to assume your existing and new roof are pitched the same. The California framing would usually require 2 bottom plates under the compound angle cut rafters because the level cut (the horizontal) cut on those rafters would be quite long. Actually that cut gets shorter as your roof pitch gets steeper. The way to determine this length is to draw your roof pitch plumb cut (the vertical cut) on a rafter and then draw a 90º line perpendicular to the plumb cut line.
As for question # 3 the transition between the new roof and the old will be done with the framing you do. Your sheeting (plywood cover) will finish right into the existing roof sheeting. You (or your roofer) will need to remove shingles (whether asphalt shingle or wood shingles it is the same either way) so the valley can be properly tied in. Valleys are a critical component of the roof that must be done correctly due to the deliberate concentration of water that will be there. Usually a valley flashing is installed and both sides of the roofing at the valley terminate over that. If your roofing is asphalt shingles then I have also seen those weaved in the valleys where you work both sides of the valley at the same time and overlap one side on one row and the other side on the next row. Personally, I prefer a valley flashing (often called w flashing or w metal).
