Yes, there are ways to get tiny. You can either play a small humanoid and use Reduce Person or Compression for one size difference smaller, or you can play a medium creature and use an augmented Compression to go down two sizes.
Being naturally tiny is possible with either the Jermlaine or Muckdweller races but those can be dodgy. Look
here for some info on them.
If you're thinking about a psionic option then the anthropomorphic monkey from Savage Species is LA+0 but is small, has 30 foot base speed, and gets bonuses to Dex and Wis.
Yes, going down to tiny would negate the bonuses a spiked chain provide since it wouldn't grant reach.
Lasher technically only allows for making AoOs within 5 feet, not actually attacking all the time into that area regardless of size. It gains the ability to not provoke an AoO for attacking with a whip, but if the whip can't reach into an adjacent square (which it technically can't if it's sized for a tiny creature) then it can't make the attack.
I've always thought it a bit annoying that tiny creatures can't use a "reach" weapon to attack into adjacent squares, but that's the rules.
If you can work with your DM to allow for a tiny creature using a reach weapon to attack into adjacent squares then that would be quite helpful. The spiked chain would allow for attacking in your own square as well as adjacent and you could get the benefit of Shadow Blade.
ToB works pretty well with this kind of concept, yes. Maneuvers help out the usually lower damage dex-based melee have.
Yes, Confound the Big Folk would allow for Hit-and-Run fighter to get the Dex to damage. It stacks with Shadow Blade so you could get 2x Dex to damage if you wanted.
Flat-footed is a state between an attacker and defender. The good news is stuff like Uncanny Dodge doesn't prevent stuff that specifically refers to being flat-footed. Take a look at the
Flat-footing compendium for more information on ways to make enemies flat-footed. That guide also includes conditions which make the target lose its Dex to AC, but that's a different thing than flat-footed despite some overlaps.
The SRD has a bit of a definition on it.