1- Austro-Hungary was allied with Germany, and by default because of that alliance, with Turkey (then the Ottoman Empire) and Bulgaria. Also for a little bit with Italy, but they switched sides in the middle of the war.
#2- Their biggest problem was their diversity. Not to say that diversity is bad, but Austro-Hungary did not know how to deal with many different kinds and creeds of people living under one national roof. All of the separate nationalities in the empire grew quite nationalistic before the war started, and so it was nearly impossible to get them all to work together.
#3- See answer above.
#4- Their goals? Not much besides power and influence. Trying to take over the Balkans was a really bad idea with no real gain, other than perhaps a foothold against the Ottoman Empire. Remember the words of Otto von Bismarck, that the next big war would be started "by some damned fool thing in the Balkans." That damned fool thing was the assassination of the Austrian Archduke by Serbian nationalists.
#5- Basically, they just wanted to go to war with Serbia, so they sent Serbia an ultimatum that they would never accept. Sure enough, Serbia said "no way!", and the rest is History.
#6- Whether or not they could have gone to war without Germany I'm not sure of. But Germany certainly didn't want to be "left out of the fun," so whatever the case was, Germany was bound to get involved.
#7- See answer 5.
#8- The crisis? Archduke goes to Sarajevo. Serbian nationalists kill him and his wife. Boom.
Also, the flag was literally the Austrian and Hungarian flags sewn together.
This is about as simple as it gets. Or so I think...
Historical anecdotes from articles, lectures, and books.