1) Is it best to send in professor recommendations by snail mail? If so, can I send all those required docs in one big envelope?
2) How long does it take after submitting your application to hear back? Do people hear back on a rolling basis? If I send in my application in Janary, will I still not find out about acceptance until May?
3) Do you find out that you were accepted much earlier than you find out your placement? If so, how long do you have to wait to find out your placement?
1) Unless things have changed, you must send in the Profex part of the application online, and then submit all documents by mail (including police report, recommendations, etc.) in one big envelope.
2) Everyone hears at once. Yes, you'll be waiting to hear about your fate until May.
To be honest, if you can't wait like that you might want to re-think life in Spain - things can get really frustrating here if you're not comfortable with the system (waiting, occasional paperwork runarounds, frustrating experiences with government offices, etc.)
3) When you're accepted into the program, you'll see what comunidad autonoma you received. Then, depending on your comunidad, you may wait a weeks or months to see what specific town you'll be in.
Good luck! Just remember to get your application in ASAP.