1-2 ) We do not support that syntax for internal links in mermaid.
You can open a feature request for adding support
for alternative text. Something like:
A[Note Name|Alt Text]--> B
3 ) Additional formatting works. You are not using the right syntax according to the mermaid docs.
4 ) Follow up here and the source and screenshot of your diagram: https://forum.obsidian.md/t/mermaid-scaling-text-cufoff-or-overflowing/4594