Hey Steve,
1. I was in a similar spot a few months back where using the max operator introduced black pixels or gaps into my overviews. However, the mosaic looked perfect when looking at scales that displayed raw images. Our issue was caused by the pyramids built for the TIFFs. Removing the pyramids on all of our images and rebuilding the overviews fixed the problem. Not sure if you are using pyramids, but if you are, try rebuliding a mosaic dataset using a small subset of TIFFs without pyramids and then build the overviews.
2. I think it depends on how the imagery was taken, and how you need each image to be placed within the mosaic. For the mosaic dataset I created using the max operator, I needed to display my images in the North-West fashion. You could also create a sort order yourself and use the 'by attribute' method.
3. Ditto to what Duncan said above about creating a separate mosaic dataset for each year. An additional question would be do you need to mosaic all images spanning the years into a single mosaic? If so, you could look into creating a derrived mosaic dataset and add the contents of the 5 separate mosaic datasets into the derrived md.
Cheers
Jon