Each of my kids has 2 names.
For my son, we had a relative we wanted to name him after, but we also had a name we really wanted to use. Since the two names go well together, and there have been rabbonim who had those two names, we gave him two names.
For my daughter, we were originally planning on only giving her one name. However, the relative we were naming her after died somewhat young. In such cases, some people hold a name should be added. We asked our Rav, and he told us to add a name. We picked out the name ourselves, not after anybody. It was a name that expressed some of our feelings at the time.
As for your #3 question: was the person chashuv? My grandfather, in my mind, was very chashuv. He went through Auschwitz and remained frum. He raised children who are frum and have frum children. He was a businessman who had a reputation of being 100% honest. That’s chashuv enough for me.
We call our son by his Hebrew name, On his birth certificate, it has the English version – to use the classic CR example, if his name is Yosef, it says Joseph on the paperwork. No, my son is not the infamous Joseph!
For my daughter, we call her what the relative was called. It’s not exactly the Hebrew or the English, it’s somewhere in between.