1. Can the menu be applied to the web template and then show on each applied that is attached to the web template?
This depends on what do you mean by "template". Menu must be inserted in the web page where you want it to appear, if you have more complex system with templating engine, you may have to use help of advanced web developer to integrate dynamic menus there.
2. Is is functionally necessary to have the images in every sub-folder of the web site, instead of in one sub-folder?
You cna have your menu files in a single folder e.g.
http://www.yoursite.com/menu/), however to achieve this, menu code must be created properly using Insert into Web Page wizard and then using "Just generate HTML...", then on the next step you are presented with an option to enter folder for menu files. In my example, you would use "/menu".
3. How, after typing the link address, do I get the sub-menu to show the link in order to navigate to it?
I am afraid I did not get the question.
4. Is if funtionally required to attach the menu, i.e. index.htm, page to each page in each folder individually?
You can generate menu as described in step (2.) above and while having all files in a single folder, put the generatted menu code in multiple files.
5. Is the Menu Make designed to work specifically with one extension over another?
What was meant by extension?
6. After going around and around with this, what am I doing wrong?
Tell us click by click where did you click and what did you do, what happened and what you wanted to happen and I'll try to explain.