The main things to watch out for are potentially toxic houseplants (http://www.cfa.org/articles/plants.html), rodent or insecticides, electrical cords (keep them bundled), and miniblind strings (make sure each strand hangs loose or wrap them around a nail so they are out of kitty's reach).
no but if you keep your cat indoors for a long time then when you want to let it out it will get really scared and may run away from people if you walk up to her/him
Most people in the US have totally indoor cats. Indoor cats tend to live longer and are healthier then outside cats as they are exposed to less dangers. Except for my first cat who was indoor/outdoor, all my cats have been born and raised inside - the oldest ones were almost 16 and 18 yrs old