My CM3 build, first impressions, and some questions.

[Flavor]

Lookin' good, danabnormal9000!

1- I definitely would put the heatsink on there. My recommendation is to put the fins vertical (perpendicular to the top of the shell). This way, each fin is equidistant to the opening. Usually you would play it with that opening facing up, and the heat from each fin should cause that air to rise out of the opening.

2- I know what you mean about the scaling, but the only "perfect" way to do it is to use the entire area of the LCD. That would look something like this modded Freeplay CM3
https://imgur.com/gallery/wAp50

3- It definitely is a Raspberry Pi, so you can do all the same things a Raspberry Pi 3 would do. I guess it depends on what you might want to do as far as how easy it might be. Maybe some others have some ideas as to what they've done.

4- I honestly have never tried. If you're trying to do a speaker, it makes me wonder if you're playing at home on a TV (HDMI). If so, you can make a couple edits to get it to push the audio to the TV. If that'd be helpful, let me know. You'd want to make a mod to /boot/config.txt

5- You will get a very biased answer from me. We made the Freeplay Zero/CM3, because I really like the GBA form factor. I think the (Gameboy Zero) DMG shell (while very nostalgic) is more bulky than I'd like. It's a lot easier to fit tons of stuff in that shell.

The RetroStone looks like a DMG and therefore (to my tastes) is also bulky and more awkward. It also uses a composite display which would probably drive you crazy if you're asking about resolution stuff. We owned a RaspiBoy (from the same guy that's doing RetroStone) and found it to be a bit off in a few respects. I mean no disrespect. I think his main expertise is in the 3D design, and he hasn't done anywhere near the level of engineering/testing on the electronic side. I'm guessing that RetroStone will work for its intended audience, but it's not my thing.