1. You would have to answer YES to your first question, its obvious they would want to know if you want to reside in ontario after you get your PR.
2. Its not going to be a problem. However, you would have to write a letter with your intention to reside in ontario. You would have to mention how the job market there is good for your profession, etc etc.
3. This depends on what you're claiming for your connections there, if you're claiming a relative, or jobs etc.. you should them the proof, for example, lets say you u claim the market is good for your job, show them you applied to jobs or etc..
I have worked on a project for a Canadian client. However, it was not in Ontario. Can I show that I have knowledge of Canadian laws and can contribute ?