OK, first off you cannot update a jailbroken device. You can only restore to 5.1. The update process is a complex upgrade from one version of IOS to another and there is no way Apple can do that reliably for a jailbroken device (it's challenging enough for a stock device). So your only option is to restore to 5.1.
1. Depends what you mean. The restore wipes the device so everything is gone. However, just the like the App Store, everything you have purchased on Cydia is yours for life. If you jailbreak again in the future you can install all your purchases again without charge. There is a "My Account" section on the Cydia Home Page where you can see all the stuff you own. If you mean can you backup all your JB apps, tweaks, and settings, then yes, but it does not happen automatically. My favourite way to do it is to use PkgBackup, but there are other options. See our guide here for more info -
HOW TO - Use PKGBackup to safeguard your Jailbreak Apps & Settings
2. Yes. If your device is running 5.1 when a 5.1 jailbreak is released, you will be able to install it.
3. As I said, you can't update. What you will do is restore IOS 5.1 and then optionally restore your iTunes/iCloud backup. Make sure you take a backup just before you restore your device to 5.1 and then in theory you should have all your non-jailbreak stuff back just as you would expect. Only your jailbreak stuff will be missing (as expected). I can't really comment on whether you will have issues. That's really all down to Apples skill in the backup / restore area, but most folks don't experience problems. I've done it probably >50 times and only had a couple of issues.
4. You will only "lose" data if you don't back it up before you start and then choose to restore it once IOS 5.1 is installed. If you are using iCloud it asks you if you want to restore your last backup when you initialise the iPad on 5.1. If you are using iTunes for backup, you can choose to restore your last backup when you connect the iPad to it the first time after it is initialised.
5. You will have to re-set your folders etc. IF you are currently using jailbreak tweaks to change the layout of your springboard. Again, if you choose to use jailbreak tweaks to change the way your springboard looks or operates, you can't expect Apple to magically support that, so if you un-jailbeak you need to expect that stuff will be back to normal and you may need to re-arrange stuff according to "stock" rules rather than jailbreak ones.
Just remember, if you go to 5.1 you cant come back to 5.0.1 as things stand. It could be a very long wait (months at least) for a new iPad2 JB, but of course the choice is yours. Only you know whether you need the features of the new apps more than you need your JB tweaks.
Hope that helps.