John,

1) I want to give my paying customers (business owners) the chance to create and upload customized information about their business and to upload a business logo image. To handle this, instead of incorporating a textarea or textbox as part of my web form, after gathering basic business info using textboxes, I create a seperate web form page for the Cute Editor control that takes what they typed in the CuteEditor "Type Here" area and places the HTML code generated by the control into a SQL database field called "Details" when they click on a Submit button.

YES.

2) I want to give my customers a limited number of HTML element choices. No document uploads ... just image uploads and insertions. No form related code.

YES, please check the following article:

How to change the layout of the toolbars? 
 

3) I want to limit uploaded images to a certain dimension, file size and format (jpg and gif).

YES, please check the following articles:

Restricting image uploads by size, width and height

Automatic Image Resize

Restricting Files by Extensions and Types

4) I want to automatically (programmitically) create a sub-folder within the Uploads folder in the root of my application (virtual domain/website) should my customer upload and insert an image at some point.  This sub-folder should automatically be given the name of the user (Membership.GetUser.UserName).

YES, please check this example:

http://cutesoft.net/example/implementSecuritypolicy.aspx

Hope it helps.

Let me know if you have any further questions.