We do not have support for updating Igloo to the newest version since updates would delete any possible modifications made to the theme. You can however do a merge of the files from the latest package into your own solution to the newest version. There might however be breaking changes in between versions, so do this at your own risk.
Yes, we do allow localhost and umbraco.io domains by default.
Yes, if you contact us we can update your domain and send you a new license file.