InDesign's built-in Data Merge utility has some limited abilty to update data (theough I've seen reports it breaks down on images), but cannot work direct from an excel file. You're probably going to want to look into one of the third-party caltog plugins. Two vendors for them are Woodwing.com and 65bit.com
Did you use any automation to set it up in the beginning? Basically, if you use data merge I think you have to rebuild the document again and again, which is fine as long as you're not making a lot of changes to it after it's built. The company I work at has a plugin that we're just now going public with that you could also use, it'll take you a little while to set up the template but after that update takes no time to update it. The address for the plugins is http://www.fuga-tech.com. The plugin is pay as you print, but you get $50 for free when you sign up which might be enough to cover a lot of if not all your project. Write here or e-mail me if you have any questions about it, I'm more than happy to help, my e-mail is email@example.com.
Yes, easy enough with data merge. Set up your excel column titles without spaces, then export to csv.
Occasionally you may need to edit the csv in a text editor to remove any extra blank fields, which show up as multiple commas a the end of a line. It can also help to select unused rows and columns in your excel file and selecting delete from menu or context menu (not keyboard - that just clears contents) - this should remove any hidden formatting or spaces which may make your csv unusable by InD. See also InD Secrets - zap gremlins
Data Merge WILL NOT WORK if the number of fields per record is not the same throughout the data file. Multiple commas indicate "null" field entries and should be left in place for any column that has a heading tag. Columns without headings should never be included in the data file.
The main point I was trying to make about data merge, though, was that it won't run directly off the Excel file, which means any time you make an edit you must also rebuild the data file. If you do catalog work on a regular basis, a commercial plugin designed for the task ought to pay for itself in very short order in increased capabilities and productivity.