70C is ok. You can certainly increase fan speed, default is like 35%.
Yes technically it does, just doesn't help for PhysX. The GPU usage is always pretty low, some games around 50%. Only once did I see it really get taxed, in Mafia 2 during a huge explosion so my FPS dropped there but otherwise it hasn't been a holdup. Aside from that, it's the 3rd GPU in my P55 board, so it's only on a 4x PCIe 1 lane which means low bandwidth, and it can't actually go over 82% usage due to this limitation so OCing hardly does anything for me.
I have both my 5850s OCed tho
Up from 725/1000 to 870/1200