(1) Yes, mechanical engineering is traditionally the most flexible of the disciplines. I think the only older engineering discipline is civil civil engineering.
Salary. I'm telling you this from the other end of the engineering career. I am currently 7 years beyond the normal retirement age, and still working - because I love it. Think about that for a minute. If someone really doesn't like what they are doing every single day, I can imagine that they look forward to retirement with great anticipation. But, on the other hand, if they are enjoying their daily challenges and still getting satisfaction and fulfillment from their work, why jump off into something else?
Bottom line? A high salary without that daily dose of encouragement and joy in your work, is still a just an unending slog of long days to get through. FIND WHAT YOU ENJOY AND DO THAT! You could make a lot more money as a plastic surgeon. Would you enjoy that? Ask anyone who has been an engineer for a few decades and they will tell you the same thing.
(2) One thing about having a degree with this kind of flexibility is that you can literally go ANYWHERE and find work. Can you name ANY field of non-financial business, especially any manufacturing, that at some point does not involve the services of a mechanical engineer to some degree? You cannot. Specialists might make more money, but they have fewer options. Example: how many aerospace engineers are involved in fuel production, or automotive systems? Very few. But how many mechanical engineers work for aerospace companies? A LOT!
Over the years, I have become a specialist in Machine Design. But mechanical engineers also work in HVAC (Heating, Ventilating, Air Conditioning), Piping, Power, Structural, and many other fields. Personally I have worked in the following fields: Volume control components, hearing aids, commercial insurance, tire manufacturing (with a patent), heavy duty transportation components, high speed machine tools, engineering consulting firms, steel manufacturing (with two patents), high end water jet manufacturing, glass manufacturing, and a few others.
(3) Masters? That really is up to you. While you are in school two years longer, other engineers are two years higher on the ladder of experience. From what I have seen, a Masters might open a few more doors, or move you ahead of some other candidates, but in general any advantage of a Masters degree disappears after a few years. The experience of others may be different, but that's what I have seen.
Another consideration of a Master degree, it tends to take you down an alley of some specialty. A good friend of mine got his Masters in vibrations analysis. After nearly 40 years in industry he used that knowledge ZERO times. On the other hand, a Masters would definitely be a benefit if you see yourself heading in a more academic direction, rather than applied engineering.