FAT (file allocation table) variant used when disk is formatted using OS X (macOS) disk utility
In Disk Utility, when choosing MS-DOS (FAT), the FAT version will be size appropriate. In other words, if creating a disk image of 1.4 MB it will be formatted FAT12, if 100 MB it will be FAT16 and in the case of your 8 GB Flash Drive it will be FAT32. The FAT (File Allocation Table) link in your question answers #2 however there is nothing to worry about as it's considerable larger then your Flash Drive.

The issue to be aware of is on a FAT32 volume the maximum possible size for a file on a FAT32 volume is 4 GiB minus 1 byte or 4,294,967,295 (232 − 1) bytes.