1. Yes, you can still elect to use form 1040NR, and you may in theory still be able to enjoy the $5000 US-China tax treaty benifit. However you won't be able to claim your wife as dependent, nor file a joint return. I suggest that you elect to file as a resident alien (in IRS sense, which has nothing to do with BCIS PR qualifiers), so as to be able to file joint return with your wife (even if she does not work), and claim your kids (if there is any) as dependent. Moreover, you should be able to gain larger deduction be itemizing all your deduction items, you may also be able to claim capital losses, etc.
2. You may only receive one exemption on form1040NR, unless you can establish that you are a resident of Canada, Korea, Japan and Mexico.
3. Refer to #1, theoretically yes, you can,since part of last year you were on OPT (i.e. F-1 status), and you may find out that you could receive a greater refund (or incur a less payment) if your tax structure is not that complicated. However you will find later on sticking with form 1040 will be more beneficial.