AFAIK the background combat mechanics have not been described. There is a bit of discussion on stats, skills, damage bonuses, etc in the topic Character Optimization.

I don't know if there is any crossover (don't think so), but human and dragon forms each have their own skills and equipment.

Equipment can be enchanted, but I don't know about charms.

Yes, Kirill Pokrovsky did the music for D2:ED as well.