Question 1: How often are offers made before the end of the interview period (i.e., before all candidates have been interviewed)?
I would say "early offers" only occur in exceptional circumstances. Universities have hiring policies and those policies require dotting i's and crossing t's -- paperwork and process -- particularly for tenured or tenure-track positions.
Question 2: If a candidate expresses that a school is her top choice, does it make any difference to the hiring committee?
Let me put it this way: you do not want to express that the school is not your top choice. The hiring committee are looking for a monogamous relationship. Talking about all the other schools you're going on first dates with isn't a great idea.
In fact, can expressing this kind of preference actually hurt a candidate's chances? E.g., perhaps it makes this candidate look like a "sure thing," which frees the department to first make an offer to another, "higher-risk" candidate. In general, when is a good time to express such a preference?
This makes absolutely no sense.
Question 3: To what extent do different departments talk to each-other?
I guess you refer to the US? If so, I don't know but I would imagine there's very little communication on an inter-department level (throughthough people in different departments may informally communicate).
For instance, is there any mechanism in place to prevent candidates from "falling through the cracks?" E.g., one can easily imagine a situation in which lower-ranked schools don't make a candidate an offer because they expect she will get an offer from a higher-ranked school; subsequently, the higher-ranked schools make her no offer and she is left without a job. Likewise, if I express a preference for school X before visiting school Y, do I risk pissing off my hosts at Y?
This again makes no sense. A university is unlikely to avoid offering you a position because you might be "too good for them" or that you might get other offers (in the worst case, it only costs a university a couple of weeks to make an offer for a position that will last many years).
A university may avoid offering you a position if you seem disinterested or if it seemed likely that you were using this position as a short-term stepping-stone to elsewhere.
Different departments are not going to compare notes. They are competing with each other.
Question 4: Do I just need to relax?
Yep. Maybe ease up on the coffee and take up croquet or smoking or something else instead.