Yes, as long as the new "artwork" is not "derivative" of the original art and you do not misrepresent it as produced or licensed by the copyright owner. See related question on NFL materials: "Can you legally make an item using NFL fabric and sell it?"
No, unfortunately.
Unfortunately, there is no clear answer to this in the law, and no apparent pattern to judgments.
infringing copyright B. flaming C. hacking infringing copyright
Without permission, yes. Even creating a GIF from existing images or video can be infringing.
Without a license, yes.
Without a license, it would be infringing to create the play, and to perform it.
Infringement is the use, without permission, of copyrighted works when that use does not qualify for an exception to current law (i.e "fair use")
Painting a portrait is typically not infringing, unless the portrait is clearly a derivative of an existing work, such as a photograph.
For sheet music, copying, altering, distributing, or performing the music in public without a license would be infringing. For recordings, copying (including downloading), altering, distributing (including uploading), or performing the recording in public without a license would be infringing.
You are infringing the rights of either the photographer who took the published photo or of the magazine, or both.
You would need permission from the copyright holder of the photos, which is not necessarily the copyright holder of the book. There should be photo credits near the photos or in a separate index; contact the rightsholders in writing, being specific about what you want to do.
How the names of companies may be used is generally a matter of trademark law rather than copyright law. If the artwork draws on another creative work that uses the company name (here, Western Pacific Railroad), there could be a copyright issue. If the artist cannot afford to speak with an intellectual-property attorney (who should be familiar with both copyright and trademark law), the artist could check with the bar association for his or her state and ask whether there is a chapter of Volunteer Lawyers for the Arts in the state. There is a potentially helpful listing at http://www.vlany.org/legalservices/vladirectory.php .