I can't answer all of your questions but I will answer the ones I can. I am in FL right at about sea level. I did the ear shave with stock exhaust and I used 142/42 jets. Now I have the Cruzers and the same jets. It has run great with stock exhaust and the V&H. My feeling on the jets is every bike is different. I went with 142/42 at the recommendation of many threads here and it seems to have worked great for me. That may not be the case for others. Some guys on here will tell you that you don't have to rejet at all for just an earshave. You may have to experiment to find the perfect combination.
For gas mileage...that will depend on how much you like to go fast.
I typically drive 65-75 on the way to work. Probably 80% of my driving is at that speed. I get about 47-48 mpg. Honestly not a whole lot different from what it was before the earshave.
My guess on what would happen if you put in those jets without doing the earshave is you will cuss a lot trying to get the carbs back in without removing all of the emissions stuff. Then you might run rich which will hurt your gas mileage and blacken your exhaust pipes, but that's about it. Really, if you are going to the trouble to pull the carbs and rejet, go ahead and do the earshave. It cleans up the look of the bike and gets rids of the emission crap at the same time and makes putting the carbs back in sooo much easier.
Just to emphasize:
* A bit more HP
* Better throttle response
* Adds to exhaust note
* Cleaner look, easier to get at carbs, looses a couple pounds
* More fun!
* MPG fluctuates greatly depending on how you ride
* Carbs can be a bear to reinstall
* May need to try different jet sizes to get a good balance of performance versus MPG (I chose performance).
#1: You can earshave and rejet with stock exhaust just fine
#2: You may need to experiment with different sizes of jets to find what you want
#3: 142/40's should be ok
#4: If you increase gas flow and not air flow, the bike will run super rich. It may not have the power / acceleration it once had or it may not even start.
#5: After rejet, MPG is mostly dependent on your riding style. If easy on the throttle, you should not see much of a drop; however, if you're like me, once you realize how much more responsive the bike is after modifying it, you'll have a hard time staying off the throttle, which of course, will hinder your MPG.