and, you should really give anima prime a shot.

yeah, you must fight the fear of going too hard on the pcs. He chose to draw unwelcome attentions even if already in a bad shape. That's a bold move, if not a fool one. Surely, it's something that will have consequences for everyone.

DW is up to the arbitration of the group, not the dm's :)

1) yes, cantrips are spells and they are rolled as such.

2) when in doubt, the group decides on what makes sense for everyone at the table. Anyway, yes. If you take prodigy for a level 1 spell, it counts as a level 0 spell/cantrip. However, you can't reduce to cantrip level a spell of level 3 or higher (since both advanced moves reduce its level by 1, a level 3 spell could go as low as level 1, but nothing less).

What's a place of power depends on your setting, your atmosphere, and probably on what the wizard tells you it is when you'll ask him. And yes, every ritual must have one in order to be performed.

ask the player, he's the only one who truly know how his magic works. Also, I don't think that there's anything wrong with sleeping while invisible.

also, you should ask your druid how often he can shapeshift. Some druids need a break, some ones are always shapeshifted...

they also earn 0-5 xps at the end of each session.

This is issue was widely discussed here on the forums. Do a little research and you can see a lot of opinions about it. The main points are:
There is no too fast in DW; leveling up does not mean the characters are inherently more powerful or tough and does not mean that you have to come up with level scaled treasures or challenges. At level 11 characters can just change class, keeping whatever move was a signature of the character, and then just start over from level 1 (or retire and actually create a new character, but that's not the point). Even if a character should manage to level up once per 2 sessions, it's ok. Also, there's no imbalance in having parties with differently leveled characters within. Leveling up mainly allows you to come up with more cool ways to influence the fiction and that's all. As a GM, when a character levels up, I'm always very happy!

That said, when some of the characters arrived at level 3 if you feel, for some obscure reason, it was too fast, you can just adjust the xp requirement to level up. Instead of 7+level, maybe is 7+(levelx3); discuss it with your group to find the formula that best fits you all. But I strongly suggest to try the game as it is before.

1) it works exactly like you did. A cleric knows every spell of his level or lower, and prepares each time a total of his level+1 spell levels. The wizard knows 3 first level spells at the beginning and learns another spell of his level or lower every time he levels up. He prepares his spells just like a cleric (as many of spell levels as his level plus one).

2) you can perform animal moves with those holds, but until you spend them all, you can remain shapeshifted and do whatever you like. Also, you can just shapeshift again as soon as you have spent your holds. Class damage never increases with shapeshifting unless you take the "Red of Tooth and Claw" advanced move. However, when you turn into a bear with the "tear them apart" move, you really don't need class damage.

1a: it never happened in my games. I guess however you just change your alignment like you could do at the end of a session. That said, you should work as a group to find a solution that satisfies everyone, like always when doing something that's out of the book ;)

2a: uhm, my reply to this is the last comment in this post: https://plus.google.com/u/0/107560837065764678288/posts/E5BFwFmJPqs

3a: are you suggesting a custom class? The internets are full of custom classes!