Best kind of insulation board possible

I personally would abandon them for something with better requirements - there's a reason that IKEA stuff is low in price, and that reason is compromises. For instance, the GORM shelving units are strong and flexible, but take a while to assemble and are kinda ugly.

In this case it looks like the compromise is the required spacing. My guess is that the heat load they produce (especially the temperature of the fixture itself) is high enough that they need the extra space to cool (a different, more expensive, fixture might have some other way to ditch the heat that would require less space).

That said, any engineer worth his salt (and his lawyer) isn't going to skimp on the required spacing. It's very likely that you could get away with shaving a few inches off of it, but there are no guarantees if you start violating the spacing requirements.

The biggest worry in my mind would be that if something went wrong (even if it had nothing to do with these fixtures), the insurance company would balk because these fixtures were installed 'improperly'.

1. You can, but there's a few issues to be aware of. First, your blown-in insulation requires space to stay "fluffy" and work well. Compressing the blown-in with batts will diminish the former's effectiveness and compromise the overall r-value.

   Secondly any vapor barrier (the paper on the roll) should be against the drywall. If you don't have a vapor barrier in place, I would address that (see this article from this answer for more info). If you do have a vapor barrier, make sure you buy unfaced (like your link), or remove the paper from your batts before installing.

   Your best value will likely be buying more blown-in insulation. If you buy a reasonable amount most of the big box stores will let you rent the machine for free. It is a messy two person job, however.

2. It looks like you have standard 2x4s on the edges where the drywall is attached, you could staple faced fiberglass batts to it. Measure between the "studs" and buy a roll that you can cut to width. I've seen skylights both with and without insulation, I don't know if there is a downside to insulating them.

Edit

If you put plywood over the cellulose, you're going to have a similar compression problem. This table shows you what kind of r-value you can get per inch. So the depth of your joists (they didn't look very tall) is going to limit the r-value you can get if you're covering the joists with plywood. Since it appears the insulation you already have is near the top, you won't see a huge gain in efficiency if you add just another inch or two of blown insulation. You might try asking another question once you figure out what r-value you have and what r-value you'd like to have. If you're near the recommended r-value for your climate and your house is still too cold, you might be better served by looking for air leaks first.