Hi Conrad,
What a tricky situation. Ultimately, these kinds of issues are hard to call perfectly because it's never pure search considerations in play and, especially with each business being different, it's impossible to be certain how search engines will treat you.
With those caveats in mind, here are my thoughts:
Question 1
Your thinking is solid. Whether it is the right call or not is impossible to know (even in hindsight) because there are simply too many moving parts. Nonetheless, I think you have sensibly weighed up the pros and cons and made the decision with open eyes. Just for completeness, I believe that point #2 is only a small benefit if at all (and probably declining) but the only part I'd really challenge you on is #3. I would personally only go down this route if the company truly is a specialist in each destination. If that is true, then great (and they likely have specialist country managers who can push forward the marketing of each site). If it's not really true and you're more just "seeking the perception" that it's true, then I might stick with the benefits of an integrated site.
Question 2
Errant 404s are a nasty and annoying problem precisely because errors do not necessarily undo quickly. I would be prepared to wait 6-8 weeks to see a recovery. You need to bear in mind, of course, that the drop could be associated with the downsides you identified in #1 (lower aggregate domain authority etc) and so you may not see a recovery from the 404s specifically. If you haven't seen a recovery after 8-10 weeks, I'd believe this was the "new normal" and would be looking at growth from there rather than "recovery".
Question 3
It's impossible to be sure. The number of "reversed migrations" that any of us have seen is tiny and they're all different so I'm afraid that your guess is as good as mine. If it turns out that improvement isn't on the horizon, then I might be tempted but I think that my approach would be to stick with the decision if you think it's the right one - see my comments in answer to q1 above. I'd change (back) only if you think benefits you expected haven't come to pass (e.g. Has conversion rate increased on dedicated sites versus how it was on an integrated one?) and the balance of benefit has shifted.
I hope that helps.