1) instead of servers there are 'districts'. You can jump between these instantly as much as you wont, and there is no penalty to it. It's kind of the norm to play in America districts, so that you see more players in towns.
2) Regardless of what anyone says, the game is still quite active. However, as the game is instanced, you can only see other players if you are in a town, and as such when doing missions etc, you won't see a huge amount of people. And, with the game being 5 years old, most players are past the low-end content, so low end missions are rarely populated, and if they are, the people there are after hard mode content (Complete the campaign once, and you unlock hardmode for that campaign, for more rewards and bigger chalenges)
3) The PvP scene is unfortunately very elitist if you want to play the 'srsbsns' stuff like guild battles and heroes ascent. If you want a more casual and less demanding PvP, fort aspenwood and alliance battles are MUCH more friendly, with little to no elitism there usually (As in all games, you will have the holier than thou assholes of course). If you've ever played WoW, alliance battles are closest in comparison to battlegrounds.
4) Pro's: Free, looks stunning IMO, much more interactive than other games, IE no rotation, you use different skills depending on the situation more often.
Cons: Old game, so playerbase is waning slowly, though with GW2 on the horizon, it's not so bad, elitism in top end PvP, lack of new content compared to some other games.
All in all, you're right, $20 is a steal, though you can try before you buy if you visit
www.guildwars.com and sign up for a free trial.