1) I base drive chain wear on stretch. As the chain wears, it will "stretch", requiring adjustments to stay in spec. I put stretch in quote because the chain doesn't actually stretch. Its overall length becomes longer due to wear between components, not due to any pins bending or plates becoming longer. Yes it's a bit nit picky, but stretch is not the correct word for what's actually happening.
2) Chains need to be replaced when links start to freeze up, or when the chain "stretches" beyond spec. Mechanical damage to the chain can also require replacement, or repair. I also replace the chain if I replace a sprocket due to wear.
3) I give it a quick look over on the weekends. I put it up on the stand and spin the rear wheel while feeling the chain for any oddities. Once a month (roughly) I give it a good inspection. I look at all the links and make sure they move freely. I also make sure there aren't any missing rings. I also do this kind of inspection before long trips. You can easily see the plates, pins, and rollers while looking at rings. They are all basically in the same place and it doesn't take long.