Your architect or designer should be able to figure this out optimally for you. Typically the Z flashing will be at the window line top or bottom.

Just say no to belly boards lol.

Well...why wouldn't you simply change the batten material to something which is more economical and appealing to you, and which better fits your exterior dimensions? At the very least you could use a 2X2 primed and painted to match the prefinished siding, right?

Ours has a trim board that runs across. I think it blends in pretty well and may actually add to the design. Ours are Just on the three gables.

Hardi sells 10' long battens.

I made my battens by ripping them out of Miratec, which comes in up to 16' lengths. You have to do a good job of priming and painting the cut surfaces.

Make the splice a design feature and locate it in a place one would not normally expect a splice (ie: NOT 8' above the ground which screams "Here's the splice!"). I'd reference the thread as currently it's a few threads below but in the event these two threads get separated an example is here: http://ths.gardenweb.com/discussions/4674826/house-plans-designed-by-arg?n=24

Very cool ARG. I hadn't noticed that feature before