I toured in Spain as part of a longer European tour in 2016.
1. I wouldn't recommend following a Camino route and expect to get the same experience as the walkers. I'd personally create my own route. Spain is very easy to navigate. Stay off the big motorways and you'll see little traffic.
2. It probably depends, but the only albergue I tried to stay in that happened to be on a Camino route prioritized the walkers.
3. If you're flying from Australia, why not fly to Paris or Madrid? That being said, we met lots of English cyclists on holiday near the Picos de Europa who had taken a ferry from their homeland to get to Spain.
4. Spain has regional trains that allow bikes.
5. I would never hire a bike for a long trip. You don't know what condition it's in and if it'll be comfortable.