Separate domain for specific content type
I had the exact same choice to make 1 year ago and Domain Access was the best way to go. 

To answer your questions:


You can always configure what content is available on each domain (basically you will set the new subdomain and set your specific content type to be available only there)
You can worry about advanced settings later; keep in mind now that almost all setting throughout the whole site can be differently set for each subdomain
A good recommendation would be a multi site install like Karel suggested
Another approach would be to just put some rewrite rules in your server, and have multiple themes set on each path which can contain a view that serves your content (this is pretty limited depending on what you want)