1) This is precisely the "best" possible way to induce antibiotic resistance. You are basically selecting out the bacteria which are able to tolerate low doses of antibiotic, which are then able to outcompete their more susceptible brethren. The result is the "normal" gut flora of these farm animals now has a built in resistance to that particular antibiotic.
2) The gut flora of these animals is excreted in waste. The mechanisms by which super bugs are created is through transmission of plasmids, bacteriophages, and naked DNA uptake, which many species of bacteria are capable of. (For a new fun threat, see
http://en.wikipedia.org/wiki/Vancomycin-resistant_enterococcus )
3) There is no "therapeutic dose" for healthy animals. Antibiotics are given to animals to increase the rate at which they absorb food. The "normal" state of the lamina propria and mucosa of the gut is a constant state of low level inflammation, which serves as a protection from any bugs that manage to work their way out of the lumen of the gut. Antibiotic use lowers the amount of gut flora, likely leading to a reduction in this inflammation that results in greater absorption of food. I am not aware of a conclusive proof of this, but animals raised in sterile conditions and fed sterilized food support this hypothesis in terms of weight gain and histologic appearance of gut tissue.
4) You don't need all bugs to become super bugs. The majority of bacteria can become much more virulent and resistant to antibiotics. It really only takes one or two, and there are nearly innumerable options that live happily as commensals in either our or other species guts.
5) This is true, but it's not really going to cheer up someone whose opportunistic infection is resistant to antibiotics.
Anyway, see #3 for a good idea of the mechanism. It's not a chemical reaction, its a physiologic consequence. FWIW, I am a medical student finishing up microbiology.