Ok, so I opened Flash Builder, created a new project and after a lot of trial & error was able to bring in all the files from the Encore output using import/general/file_system in one chunk. That at least gets me to something that might have a future!
As to question 1 above: Many of the articles I've found in the Developer Center refer to various versions of tools: Flex, Flex Builder (now called Flash Builder), Flex SDK, Spark, ActionScript and Flash Catalyst. The products seem to have undergone quite a few transformations and specific processes like roundtripping between Catalyst & Flash Builder are now obsolete since Catalyst is now a dead product. So does this mean that all (or many) of these confusing tools are now united in Flash Builder 4.7?
And this begs the question "how does a newcomer get started building an AIR app without having to learn the entire history of Flash and it's evolution from simple display of vector graphics to a Swiss Army knife environment?"
Did you ever get your question answered? I have serched high and low for something sinilar to what you are working on. With no luck.....
Several people before me also looked for an easy way to get from the FlashDVD.swf export to html to a more generalized MXML Flex project that could actually be used in a mobile environment. The only way this could happen is if the Adobe Encore team were to develop a new project export option such as "Export to MXML", and this is unlikely to happen unless someone high enough in management allocates funding. Right now Encore seems to be seen as a DEAD LEGACY PRODUCT - which is a shame, because it is the perfect tool to go from Video to Mobile.
I've actually been working on rebuilding my Encore project in FlexBuilder 4.7 as an MXML AIR app - so far it is working in my Windows 7 FlexBuilder environment, but the articles on moving it to Google Android are so obsolete as to be useless.
My next step seems to be to attend the next meeting of the Bay Area Cold Fusion User Group and see if I can find someone to mentor me through this mess.