1. Yes, they have separate resources, you will make new HPUX installation on every new VM.
You can configure your CPU entitlement as you like with virtual CPU.
It is possible to go as low as 1% of one CPU for one VM.
2. I would recommend reinstalling the box, and making setup as per documentation.
Since you will be installing a lot, a good start would be to install ignite, make a install depot from DVD and boot clients (VM's) via BOOTP or DHCP (i would go bootp, long forgotten but very useful and easy
)
Use your PA-RISC box for this, since you can have ignite on 11.11 or more, and boot / install any version of HPUX from it.
It's a bit work on start, but later on you will be able to get VM's up in short time, use ignite for backups on tape or disk etc.
3. As for patches, you will need to have some sort of HP support to download them.
Make a HP account, contact your representative for information about your contracts.
I believe SWA will want to connect to internet with that account to gather information about missing / rec. patches.
All my boxes are behind firewall without internet, i only gather reports from HPSIM with SWA installed.
Most of the time, after OS install, you will just need to apply the gold qpk patch bundle.
It's fairly simple with swinstall, one big depot.
Remember, you will need to patch VM's guests as well, since it's a separate HPUX install.
Good luck.
Hope that helps
Regards
Peasant.