3) The Earth orbits the sun because the sun has a a larger mass and therefore more gravity. The Earth's inertia makes the planet try to move in a straight line but because of the sun's gravity, the Earth keeps getting pulled around the sun. The orbit is a mix of inertia from the Earth and the gravity from the sun.
4) If the Earth suddenly were to lose it's inertia, the only force that would act upon it would be the sun's gravity. Since the sun's gravity pulls objects toward it, the Earth would collide into the sun.