That's three questions...
One of my crafting toons, Ditch Digger (he digs ditches), has a very simple approach. It may not be as efficient as a lot of niches, and it can be very random, but it's profitable and easily replicated if you want to try it.
He buys cheap lvl 30 yellow recipes and crafts them. Call that cost 50,000 inf.
He converts by uncommon until he gets a good category (usually one conversion) or a good enhancement. Once he gets a good category, he converts by category until he gets a salable rare. In a few cases he will then convert by set until he gets what he wants (like a karma def/end into a knockback). I would say on average, that's 3-7 enhancement converters, sometimes more. Let's call all-in-cost on average somewhere in the 500k range.
For your question 1, I will usually target anything that will sell QUICKLY in the 1-2mm range. The travel stealths are a good example of high turnover that I can make sales at over 1mm within a few minutes. I don't bother with melee rares anymore, since you may be able to get 1-2mm for one, but it may take a long time.
2. Shinobu covered it.
3. It depends on my mood at the time. Usually I will convert it to the +recovery, but not if the +recovery is selling for under 5mm at the time. It also depends on how many converters I have on hand. I always try to buy those at a discount (hey, he digs ditches, remember?) so if my bids haven't come through I'll put whatever I have on the market.