1: You can make your own color scheme/chapter for your loyalists, your own warband for your chaos marines, and you can always make a custom legion with the two 'unknown' legions. Try to keep the color schemes uniform, try to keep the chapter icons uniform, but other than that, go crazy.
2: The most powerful loyalist chapter is out of Codex: Space Marines, the White Scars Gladius Battle Company. Part of the aforementioned Gladius would have Dreadnoughts in drop pods.
If you want to use the Ultramarines legion/Chapter, you could still use the White Scars chapter tactics if you want. If someone gives you a hard time, they probably aren't the person you want to play with anyways.
And yes, the Word Bearers still exist, and their Primarch Lorgar is a Daemon. They are one of the few Traitor Legions that still operate as a Legion.
3: Just glue them to a 40mm base. Nothing else needs to be done: the Space Hulk terminators are good for having some more unique looking Termies.
As for a tip: Do what you enjoy. We can tell you all day about how this or that is better, but if you don't enjoy the color scheme/army/theme, then you will get less out of the game than if you are doing something you enjoy.
Unless what you enjoy is winning, then sell your marines and play Eldar.