Hi Lisa.
To answer your first and third questions: Yes. You can have as many child categories as you like. A quick search of the
WP site did not reveal and documented limitations of
WP, so the sky is the limit. There are many customers that do exactly what you describe.
What is the support like? Actually, pretty good all in all. We have support staff located all over the globe, and do our best to respond as quickly as possible. Our aim is to respond within 24 hours if possible. Add to that the awesome community. Customers are constantly sharing ideas and helping each other out. It was the community that originally sold me on ClassiPress. But please remember that we are human, and need to spend some time with our families/eating/sleeping just like you. ;-)