1. Can you browse games like in Diablo 2? As in, do you create your own game, giving it a game name and potentially a password and level restriction relative to your own level which then shows up in a list along with other games of that difficulty level?
Currently you can browse by active quest, since everyone in a game shares the same quest progress, so you can decide, for example to just join someone doing a skeleton king run.
2. If you can in fact browse games in the same matter as in Diablo 2, have you noticed anything on the UI allowing you to choose which difficulty you're browsing? It has always bothered me that I had to switch characters in Diablo 2 to browse lower difficulty games, an option for doing so is one of the things I've been hoping to be implemented into D2 for a while now, and would love to see it in Diablo 3.
We have no way or knowing, we are in the beta, the max level is 13, we aren't getting out of normal difficulty.
And just to be clear, I have heard of the new matchmaking system searching for games by a specific quest, but no clear indication of whether this has replaced the old system or merely complements it.
As above, but take into consideration some of the UI looks like its built to serve a slimmed down beta client, so any answers on how the final game will work will be nothing but speculation.