1. Where's the incense? I swear, y'all used incense when I was little, even if it was so little I could barely smell it.
I agree with you. Incense was the standard for all High Masses and Solemn Masses, but somewhere along the way some crazy people decided to ditch it. It's not necessary, but it is preferred. And should be used.
2. The wine used for communion wasn't red, but pink-ish. Do they dilute the wine, and then mix it with water?
Rose wine is considered acceptable for Eucharist.
3. Why did only the priest partake of the wine, and the faithful only received "host"?
Probably because of a lack of people to distribute it. The Roman Rite never evolved a way like the Byzantine Rite for effective and easy distribution under both species. Having everyone drink the Precious Blood from the Chalice directly is difficult.
4. Why do you sit during the Gospel reading, yet you stand for hymns? Not to sounds standoff-ish, this just really surprised me. I fealt like sitting in the comfy pew while the Gospel was being read was somehow disrespectful.
No. That's an abuse. No one was supposed to sit during the gospel reading.
5. The person for whom the funeral mass was for was my grandmother. She was cremated. I thought that the Roman Catholics didn't do cremation?
Used to be forbidden. Now just frowned upon - as long as you don't treat the ashes with disrespect.
6. Why was it ok for a parishioner (a woman, no less) to touch the altar? Are people allowed to just approach and touch it when preforming some liturgical function (I think she was bringing the priest the "host" (wafers))
Modern liturgical abuse. We apologize.
7. Lastly, why do you no longer respond with "and also with you", but now use "and with your spirit"? Going East, are we? I don't blame you
Because we got rid of the crappy translations. It's not an Eastern thing - it's a stupid English translation thing. #$%^ing ICEL.