1) You're right this is a vanilla server. Here anything goes, and that includes the formation of factions. If you don't want to be involved with factions then stay away from them.
2) Faction activities can effect others outside the faction, but generally they're contained to their own ranks. If you don't want to hear about what what a faction is doing then grow up and ignore it or politely ask them to take it to private chat.
3) Yes, hostility is generated when groups of people come together, but if it doesn't concern you, then I don't see a reason to complain. Again, ask faction affiliates to take it to pm. I'm sure they won't take offense.
4) There is powers in numbers, that's the point of having a group. Most of the power is internal and doesn't reflect the majority of players at large. The random tp eliminates any chance of ambush at spawn. Even if a faction had 100 people and they wanted to hunt down one person, it wouldn't help locate bases on server this size. The only effective way to get base coords/locate an individual on this server is through espionage. So when in doubt, stick to the people you trust.
5) PVP can happen outside of the arena, it's just unlikely. This is the same for factions, you can come across them but it's unlikely.
If you have an issue with a faction (Red Army, Oceania, Elephantia, ect.) then how about taking the mature rout and talking to the individuals in said faction. I am aware there is drama caused by factions, but at the end of the day we are just a bunch of individuals playing on a game intended for children. None of this is meant to be taken very seriously, it's all one big game where people try to have fun, and the community on this server is one of the best I've ever seen. I can assure you any member of any faction will be willing to hear you concerns. If not, then talk to the faction leader. The players on this server can empathize with you, and would be happy to try and accommodate for your concerns.
If restrictions are placed on factions I'm ok with that. In fact I would love to hear more staff opinions on the matter so no one's fun is being impeded on this game.