Or maybe the word was subverted after it was chosen to represent this concept? Not saying it was the case (I don't know) just mentioning the possibility.
Seems to me that if you use compressed air to displace water within the sphere, you could actually store more energy this way... That would require the air to drive electric generators when the sphere is being filled with water though.
There's a link to a demo, but the machine it's running on is not really powerful, so expect poor experience. You'll do a lot better downloading and running the code on your own.
Personally I think it should be great for such use, especially with some improvements version 1.0 has (like the crs-simple) you mention. You will have to split your PNG image into tiles though, and ideally have different zoom levels available too (leaflet won't do that for you, but there are tools floating around)
Regarding #1, I'm assuming my own good faith in this :)
#3 in the second clause is indeed tricky, but I suppose it could be worded in legally unambigous way. And anyway I always assumed the dealine in #2 would be no more than three years in the future since the software is first published under these terms.