Better to keep frequently used apps on the Android device or move them to an external microSD card?
It depends on how you use your phone, but under normal circumstances (no task killer apps, small to medium sized memory consumer, etc.) category 1 apps are typically held in RAM. So I guess reading from SD card you will only notice when the app is started for the first time. But beware, that SD cards can outperform internal memory performance: General difference in read/write speeds for internal memory vs SD card

Best advise I can give: just try and use what is best for you. If you experience performance drawbacks, just put the app back to internal storage, if not, than you can leave it on SD card.

Regarding the life time of SD cards, I guess, unless they do not perform to much IO to the card but operate on network and RAM it does not matter. Personally I just put every app I can to SD card, to have more internal memory for apps I cannot move to SD.