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Yes there is still hope. Just give it a chance, I would have put some bone meal in the hole before putting the plant down and made sure that I loosen the soil in a wide area around the plant to encourage spreading roots.

Yes you can. Be sure to water it with some water that has a good root stimulator and a product called Super Thrive mixed in the same water. This will help the rosebush get its roots going well and deal with the transplant shock as well. I would prune it back a bit prior to transplanting and remove at least 80% of the buds and blooms if not all. This will help it focus its energy on getting its roots set instead of trying to bloom well and get its roots established. I water them with such a mix at least 4 times as it needs watering after transplanting.

Prune old wood at base

They could be sucker shoots that suck alot of nutrients from the bush and do not produce any or small flat blooms. Best to prune them out as far down as possible and seal the end of the cut with white Elmer's or Tacky Glue.

Sounds like she is trying to battle black spot fungus and likely other funguses. I would recommend spraying the rosebushe with a fungicide called Mancozeb. It is available from http://www.rosemania.com . It does leave a yellowish powdery residue on the foliage but that is part of how it works. Water the rosebush with some water that has root stimulator and a product called Super Thrive in the water the next 4 to 5 times it needs water. One of those times, sprinkle 1/2 cup of Epsom Salts around the base of the bush, work it in lightly and water it in. Then keep it sprayed with a good fungicide for treating black spot every 10 to 12 days and feed the bush with a good organic based rose fertilizer.

I am attaching a link to an article about rose diseases. It sounds like a disease called Canker that is kind of like cancer in humans. Keeping the bushes well watered and fed usually gets them to grow out of the canker though. You could give them a treatment of the Bayer Tree and Shrub granules their systemic action cures many disease ills. Follow the instructions on the label for shrubs/ornamentals.