Yea there is the island with the 7th gym on it is an island.
Of course, there are Moltres, Zapdos, Articuno and Mewtwo.
Only Generation 1 Pokemon may be traded between Yellow & Silver. Note: The player using Silver version must only have Generation 1 Pokemon in his/her party and the Pokemon must have learned no moves that did not appear in the Yellow version. Also they mustn't be holding any items that didn't appear in the Yellow version.
You can't find Ho-oh on Pokemon Yellow or any other version that is based in Johto but I think you can get it in a trade.
You can not swim in any of the Pokemon games. You can Surf, however, in EVERY game.
Nothing of any real importance, but there are a few items
Full restore is an item that you can purchase at a pokemart it heals all hp and any status problem for your pokemon.
The Orange Islands do not exist in any Pokemon game.
you cannot rent any Pokemon in red version
No. None of the old Game Boy or Game Boy Color games work on any version of the DS.
No you can only transfer a Pokemon to another game that has that Pokemon is that database. So You couldn't transfer say Entei to classic Yellow version because Yellow doesn't have it in it's database. But, for the new games I have not tried but just try and see what happens.
Yes! There will be Pokemon Black Version and Pokemon White Version in 2011.
Go here for everything you wish to know about how to raise happiness in any Pokemon version: http://bulbapedia.bulbagarden.net/wiki/Happiness