Ad 1): This is right, and proves that at the origin the directional derivative of $N(\cdot)$ is $=1$ in all directions. Here the directional derivative of a function $f$ at a point $p$ in direction $u\in S^{n-1}$ is defined as
$$D_uf(p):=\lim_{t\to 0+}{f(p+tu)-f(p)\over t}\ .$$
The fact that $D_uN(0)=1$ for all $u\in S^{n-1}$ already proves that the function $N(x):=\|x\|$ is not differentiable at $0$, for the following reason:
When a real-valued function $f$ is differentiable at the point $p\in{\mathbb R}^n$ then one has
$$D_uf(p)=df(p).u\ ,$$
and here the right hand side is a linear function of $u$. This implies that
$$D_{-u}f(p)=-D_u f(p)$$
for all $u\in S^{n-1}$.
Now the origin is a very special point for the function $N(\cdot)$. At all points $p\ne0$ the norm is differentiable, and one has
$$\nabla N(p)={p\over\|p\|}\ ,$$
which implies
$$D_u N(p)=\nabla N(p)\cdot u={p\cdot u\over\|p\|}\ .$$