Depends. Breeders who are spawned several times die sooner than fish that don't spawn. But in general life span depens on care. A betta in filtered and heated tank will last longer than one in a bowl. If you excersize your bettas (gently chasing him around with a net) he'll get the excersize he needs and some live up to 10 years that way!!!
That's your choice, I've never used it. But if you don't him to suffer than yes. That has to be the worst case of dropsy I've seen. It's a terrible disease. I'm sure you did nothing to cause this (unless you fed him live black or brown worms). Some fish just get it. :/