1. Yes--- there is hot chocolate in souvenir holiday mugs which we love to get while watching the lights. They also have holiday cookies which we get to go with the hot chocolate. They also have glazed nuts, cinnamon sugar pretzels and other pretzels and churros and you can buy cheese or chocolate sauce with those,, they also have holiday cupcakes and rice treats, caramel popcorn, cotton candy, and beer, wine and egg nog. I believe the stand is also open during the day, so it is not only Osborne, but it definitely has a holiday menu. They also have stands with light up toys and things for sale.
2. As a previous poster said- it is packed during the lighting ceremony. We did that once and said never again. It is usually much better later at night- although with it being the last year, it may be constantly packed. Our absolute favorite time to do them is during EMH evening hours if that is an option for you. We have found them to be crowded at the very beginning of EMH- but about 30 minutes later they were relatively empty. There was plenty of room to see everything and DD loves to dance to the music. (Fyi- even when it is crowded, you can usually find a spot back by the restrooms with space to dance if you have kids, or anyone else, who are moved to do so!)
3. Enjoy. Take the time to really enjoy them. Have hot chocolate and a treat. Listen to the music. Look for the Halloween cat that is hidden in them every year. Take photopass photos. There are several spots where the photographers are set up, and Santa Goofy has been there the last few years (although they had Santa Goofy out during the day last year and his line gets really long during Osborne lights- so you might want to catch him during the day if you can).
I'm so jealous. The Osborne lights are my absolute favorite holiday thing at WDW. I have really fond memories of a trip where we have friends meet us at WDW, and DD and her friend were dancing with the music just filled with joy, and the parents gave in and were dancing with the kids. When they announced recently this was going to be the last year, I tried to find a way to get us down for a weekend to see them one last time, but the airfare and trip was just going to be way to expensive for a very short trip. Have a great time!!!!!