Nope. We use a white bed sheet for outside and a blank white wall at work.

No audio out from the projector. When I want to use external audio, I run video only to the projector and run audio straight from the source. Hope this helps.

It will work as much as 2/3 light on room if possible to set light to 1/2 will do your work.
If I do understand you will put the small canvas and then the next size etc...you will see only the part that is bigger than frame because the canvas wont allowed the light pass.
Go to epson.com for exact relationship between screen (canvas) and projector, I think will be really near due the great of this projector is whit a few distance make big size, for your purpose could be a range 3 to 5 yards what makes better work on a full light environment.

Yea..I use it to play my Xbox 360 outside in the backyard