I have no idea for your second question, but I can help for the others:
For the first question, this plugin command alter the player's light (and only this one), so it shows a fire effect. The MZ version is a little more clear about what each parameter does:
* @command setFire
* @text Set Fire Flicker
*
@desc Alters the flickering of "Fire" type lights
*
* @arg radiusShift
* @text Flicker Radius
* @type number
*
@min 0
*
@Default 0
*
* @arg redYellowShift
* @text Color Shift Intensity
* @type number
*
@min 0
*
@Default 0
As I said, I have no clue for the second question.
Third question: There is no transition, but you can easily create this effect by adding for a short amount of time one or multiple intermediate colors.
Ex: <cl: light 300 cycle #ff0000 15 #ffff00 15> becomes <cl: light 300 cycle #ff0000 15 #ff5500 3 #ffaa00 3 #ffff00 15>
For the last question, individual lights (which includes the player's light) can't fade out with the current version of the plugin. Only the light mask who covers the whole screen can.