1) If I only have Reason 5, can I jump to 7 and does it give me all the features of 6?
2) Does it require a dongle?
no - you can authorize your computer once and then fire Reason up like you are used to with version 5.
Or you can use internet authorization (just a log-in screen when starting reason)
3) If yes, what happens if you lose the dongle?
if you loose it, you can buy a replacement one (30 bucks in the props shop, I guess). But since you won't have any...