Yes, that's really all I do consistently other than diet. I run a little and ride my bike when it's nice out (I hate excising in place ie treadmill/stationary bike.), but I seem to always get an injury in the winter when I try to keep up on cardio. This year it was a bone bruise that lasted about 3 months, so there was no squatting or running. I initially gained weight when started this thing so I know I added some muscle. The only real measurement I took was my biceps which grew a half inch at one point, but are now back down to where they started. I guess my neck on my dress shirts is still about the same too. I think I'm to the point now where a bit of muscle is going to start getting sacrificed with any additional fat loss.
Not necessarily...You can still maintain your muscle while you continue to diet. You might have to adjust your diet some like adding a little more protein and healthy fats but shouldn't lose very much muscle, if any at all while you do cardio.
Yeah I know that you theoretically should be able too, but I've always had trouble eating enough protein as it is. unless I eat eggs and a shake every morning (which I get sick of) I'm usually of by about 40 to 50 grams of the 1:1 ratio for body weight.