Google does love new content. I dont have an exact answer to the question, though I would be sure that if you do have your content rotate that everything else retains your SEO and/or your content follows.

First, your home page content should be a short description about what your site does. It doesn't matter of its a 300 word content or 1000 as long as its unique, Google always love new content and specially that is very interesting to your readers.

Depends honestly. Running 1000 words will make it hard for google to actually look at the rest of your page. Shorten that up, sticky it, and include more posts that rotate below it.

concentrate on content quality not on no. of words....

I actually have two blogs, one has a static home page and one has the most recent posts. And they both do equally well in google. I really think that it doesn't matter, just make the content on your static page (if that's the way you go) very 'sticky', as these guys say. My site has an introductory paragraph, then introductions to the different areas on my site. It's kind of like the beginning of a walking trial.