I am projecting here, perhaps, but I think the question you're asking is "why doesn't my salmon come out moist and succulent like what I get at the store?"
A couple reasons.
First: you want to properly cure the salmon for at least 24 hours beforehand. 36 is better. To cure, you will need two whole sides of salmon (or one cut in half), with the skin on. Rub your cure into the flesh--so 2:1 salt:sugar, plus whatever other spices you care to use. The addition of brandy sounds lovely; I like tequila or a nice peaty/smoky Scotch myself, or maple syrup (but obviously nix the sugar if you're doing that). Place the two pieces together, flesh to flesh, optionally including herbs between. Wrap very tightly in plastic, completely sealed, bung into your fridge to let it cure.
Second: when the fish is cured, remove from the wrap, rinse off the cure.
Third: time to smoke. If you want dry and flaky, hot smoke--this seems to be what you're doing and what you don't like. Therefore, it's cold smoke time. The two basic ways to do this are either to add LOTS of trays of ice to the smoker itself, or to route the smoke through a cooler filled with ice and then back into your smoking chamber. A quick Google should provide you with diagrams for doing so.
Do not over-smoke. Fish picks up flavours quite readily, and will dry out if oversmoked, even if cold. Really for salmon I don't think you need much more than 20 minutes of cold smoke.
1- The meat drying out is a very real problem when cooking for so long. When I have smoked with water it has seemed to be less of a problem. I'm sure it also gives a nice thermal buffer but I haven't conducted experiments on this.
2 and 3-
When I built the AB style smoker mine was smaller and earthenware so it would retain heat better. My cheap little hot plate was not able to get the temperature up to even 200F.
With a bigger smoker and one made out of metal I don't think a normal little hot plate will be able to get hot enough. You can experiment of course. It may be that my cheap hot plate was just under powered.
In my smoker I adjusted the hot plate temp knob as necessary. Eventually of course it stayed at full on.
If you are interested in more of a project- there are many hobbyist projects for making temperature controlled smokers. They would be more work but for an excellent reward. I was just looking at this one today that uses a wireless router for a web interface and an Arduino for control. Kind of like a homemade sous vide setup but for a smoker:
http://tvwbb.com/eve/forums/a/tpc/f/9270072103/m/5721075126
Best Answer
It is okay to use wood, you need to ensure that there is not pine or especially MDF dust in the sawdust that you are using. Approach with caution, unless you can absolutely guarantee the source of wood shaving/sawdust is what they say it is then leave it well alone. There are a lot of joiners using MDF and pine and to have a batch of oak or cherry contaminated with either of these products will render any food you smoke as inedible at best and actually quite dangerous.
If you'd rather enjoy a more DIY approach you can harvest wood after fresh autumn or spring winds. The best time for collecting wood is in the winter or very early spring before the sap rises. The sap will add moisture and a slightly bitter taste to your wood shavings due mainly to the higher resin and sap content of the wood. This can be avoided by choosing when to collect. I wouldn’t hold onto this rule, but if I had a choice, I would go for the winter harvested wood.