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Check eBay. I have had great luck finding hard to find plants on there.

Yes, it will grow indoors in a bright window. I have had one for 7 years now that spends half the year on the porch and the other half in my dining room.

There are many reasons this can happen. This article will help you determine which may be affecting your plant:
https://www.gardeningknowhow.com/plant-problems/environmental/plant-leaves-turn-yellow.htm

I would check with your local nursery for a larger pot. As we are not sure how large the rootball is, it would be difficult to say where to find a pot. If you have not already considered it, you may want to think about using a half whiskey or wine barrel for the pot. In the short term, wrap the rootball in plastic and spray it down twice a day (letting the water flow away and not sit in the plastic) to keep the roots as healthy as possible.

Yes, you can trim back the roots. This article can help you with that: https://www.gardeningknowhow.com/houseplants/hpgen/prune-roots.htm

It sounds like it has a fungus, likely black spot. Treat the tree with a fungicide and it should clear it up. I like to use neem oil on plants I plan on using in food. This article has more on it: https://www.gardeningknowhow.com/plant-problems/pests/pesticides/neem-oil-uses.htm

I think it is likely a nutrient issue. Have the soil tested, but in the mean time, it should be safe to give the tree a balanced fertilizer.

You also did not mention how close your sister-in-law lives to you. There may be slight climate changes that are influencing the growth. Even if she lives nearby, she could have a miroclimate (https://www.gardeningknowhow.com/garden-how-to/projects/how-to-make-a-microclimate.htm) that is helping her tree along.

Sweet Bay is slow growing to 12-15 feet wide. I tell customers that if they cannot wait for the screen to mature to size naturally, plant on spacing for one half the expected width, then cut every other plant out when they touch. For instance: Sweet Bay should be planted on 12 foot centers. If you want a fast screen, plant on 6 foot centers and when they touch, cut out every other sweet bay. IF, you have room, plant 2 rows, 15feet apart and stagger (zig-zag) your plants. That way, you won't have to remove any, and all will have enough room!