1: Yes, this would indicate there's no link on vmnic1. Is there a physical link light?
2: Per-nic DNS servers doesn't make a lot of networking sense. Which DNS server will it use for a certain lookup? The OS has no way of knowing that a certain name will resolve to an internal IP and therefore should be looked up using your "internal" DNS. Just point all your DNS at the internal DNS server. It's not like that server can't resolve public IP addresses right?
3: Should do