Well:
1. Rated 125hp at the crank, though dynos of stock cars show ~115hp through the wheels.
2. CAI helps, as with any car, though the Protege is special. You can(and should) get a B-code airflow meter from a '86-'88 RX-7 non-turbo, it's plug and play with the Protege and the bigger size/better flow, when tuned properly, can produce a dynoed 8WHP, just that. Add a better intake tube and you can get even more, though many(myself included) keep the intake box(known as the Helmholt's resonance box) because it increases low end power/torque.
3. Plugs/plug wires should be NGKs. NEVER use Bosch anything because they're crap and will make the car run like crap. Crap!
4. Chip? No...
5. 25hp is possible, though a lot of work is needed. With the RX-7 AFM(or a hybrid AFM, which I'm currently running), you get ~8whp. There's another mod called the 'Exhintake', which is putting a stock BP exhaust camshaft in place of the intake camshaft, its lobe profile is more agressive and has been dynoed to produce 8whp when used in conjunction with the RX-7 AFM, and without the AFM you'll get around 5whp. Other things, such as an aftermarket exhaust manifold and the exhaust itself, and a timing bump, can yield around 20 whp. Of course, you can turbo the car pretty easily(turbo version of the BP found in Japan, Australia, and Europe) and make 200whp pretty easily.
6. Ah, Seafoam. What fun! I did my Protege, a can through the intake manifold. Seemed to smooth out the engine after getting rid of 135,000 miles of carbon buildup/whatever. The smoke alone was well worth the can. Nothing quite like going for a drive, then gunning it to the redline and smoking out the cars behind you, the whole road, and the people on the sidewalk. Mine actually smoked pretty well for a few miles. It was great!
7. Potential problems...there's really nothing different from any other car that I can think of. Just basic mantinence. The intake tube likes to crack, so keep an eye on that.
Hope that helps!