Yes, this should create a continuous top rail.
No. This handguard is the same height, but is separated from the upper receiver rail by the delta ring. It is not continuous.
If you mean continuous as in uninterrupted then NO, this fits into a delta ring assembly so there WILL be a gap between the receiver and the rail.
If by overlapping you are referring to the small piece of aluminum that covers the delta ring by some manufacturers, no it does not. This rail will have a gap at the delta ring location. For an "overlap" look at the troy enhanced rails.
I'm seeing some misinformation in these answers and the real answer is NO. Continuous rail means it will have seamless coverage OVER the delta ring and gas tube. This does not, There is a small gap, as there is most drop in handguards. I'm not sure if Knights makes a rail that has the coverage you're looking for.
Yes it does. Meant for a mil-spec M16 style rifle, with mil-spec barrel nut, delta ring, and end cap & front sight. So you'll have a continuous rail to the front sight (rifle length barrel & gas system). Based on how it secures to the weapon, if your rifle configuration is such as stated above, (and not say, utilizing a low-pro gas block and no end cap) you'll be fine.