Do a search on the web - especially for mp3 player projects - believe me there's plenty.

1/ 16 bit transfer is accomplished using a register - write hi 8 bits to register then do a write. cpu 8 bits along with register 8 bits = 16 bits. Similar for reading.

2/ The IDE interface only needs about 4 address lines as it is register based.

3/ plenty of examples on the web in 'c' and asm.

4/ see above.

5/ normally the hard drive is formatted using a PC. not to say it can't be done in a microcontroller, but it takes some time to execute.

try http://www.pjrc.com/tech/mp3/

this was found in the "links" in the sidebar

In future, search this site and the web, and you'll most likely find something.