I'm a current cambridge econ undergrad - so obviously you should expect quite a biased opinion here
For 1 and 2 I think it is generally accepted that both Oxford and Cambridge will take a holistic view of applications, I don't think either necessarily values interviews more than the other. To be accepted you need to be an all round strong applicant with a good PS and a relatively good interview. However, it is important to remember that (at Cambridge at least) there are no set weightings on each section of the application, so there is no point trying to game it on this.
For 3 don't let that put you off - remember it is only 1 of 5 choices so there is no real harm in putting it down, if you don't apply you definitely will not get in so you may as well give it a go.
For 4 the course at Cambridge is as mathematical as LSE/UCL so you do need to like maths, it's slightly different to A-level maths in that it is obviously applied to economic theory. What you need to be good at is quickly picking up concepts, you don't have time to fall behind.
Now for the bias- I know several people who go to Oxford who all claim E&M is a bit of a joke, there isn't a huge workload and none of it is that difficult (apparently).It's seen as a course for people who want to go and work in the City afterwards. Obviously I don't do it so can't give an accurate description - this is all just hearsay. The Cambridge course is definitely rigorous and gives a thorough grounding in Micro and Macro.
Look at the courses in more detail to see which you would rather do. You need to think about whether you want to take a course that is only half economics (I didn't apply to Oxford because I didn't want to do management). It is also important to consider whether you want to go to Oxbridge - obviously there are a lot of good things about it traditions/strong courses etc. but there are also a lot of negatives so please weigh those up and decide whether it is worth it before you apply.
Any questions about Cam feel free to message me or just reply on this thread