I'll try and answer these as best I can.
They can be used in instances to fill an empty group slot. So, in a group of 3, you could use someone's companion to fill the fourth slot. Or two slots if required, etc. You don't have to though.
Your force alignment can effect their affection for you, if I recall correctly. Some character love it when you flush folk out airlocks, others don't.
As for levelling up, I assume that they're just your level when you summon them, but I'm not sure on this one.