So basically many of the 'monsters' in the game are actually part of the souls of real people. The ancient egyptians believed there are several different souls within a person, one of which is the 'ka', the spirit that reflects the nature of the person. In the distant past, priests used the millenium items to seal 'ka' into stone tablets, and these 'monsters' (I write it like that as some are not especially 'monstrous' like Dark Magician) could then be summoned and controlled.
When Pegasus created the duel monsters card game, and the cards it was played with, 'somehow' those cards became linked to these ancient spirits, maybe due to the Millenium Eye. The God cards are the most important example, GX's Winged Kuriboh is another. They normally appear as holograms, and these are not 'real' and can't affect anything, but when magic is involved (such as a shadow game), the actual spirit can be summoned. The spirits can also appear under other circumstances, they can appear to special people such as Judai and Jun.
As well as this there is evidence that other, otherworldy creatures have been summoned from elsewhere, such as the Neos monsters, and monsters who fought during the times of Atlantis, several thousand years before the time of Ancient Egypt. All these spirits live in a spirit realm inhabited by aliens, dimensional beings, myths, legends and people's souls, and it's from there they are summoned.
3 - Yubel's back story isn't particularly detailed. She was turned from a human into a monster spirit. In modern times, a card was made of her. This established some kind of link to her spirit in the spirit world, allowing her to manifest herself, just like Winged Kuriboh. How did they know who she was or what she looked like? No idea.
4 - She's a real spirit, inside and outside of games. She is not a hologram and does not need to be summoned by a shadow game. She has the power to affect people with her powers, just like the very real 'ka' monsters summoned in ancient times, had the power to harm or even kill.
5 - The cards are linked somehow to real spirits.