Is it permissible to recite the Holy Qur'an or to play a recording at mourning gatherings? Or is it considered an innovation?
Whenever Qur'anic verses are recited, it is obligatory upon everyone to listen, otherwise; they should remain silent. And Allah Knows Best.
When the soul leaves the body, does it hear and see? And where does the soul go?
The important thing is that the soul departs while its owner is a believing, repentant Muslim, as this is a good ending. As for the details, they are lengthy. The grave is either a garden from the gardens of Paradise or a pit from the pits of Hellfire. And Allah The Almighty Knows Best.
Is it permissible for us to sever ties of kinship if our blood-relatives` gatherings/meetings involve acts of sin?
Observing kinship ties is obligatory, and paying your blood-relatives a visit causing their sinful acts to be hindered , then you should do so. However, if their sinful acts continue while you are at their gathering and they didn't respond positively, then observing kinship ties via telephone and the like will suffice in this case. And Allah Knows
Should a person feel pleased, or have a virtuous vision after offering Istikhara (guidance prayer) in order to do what he/she had offered it for?
The result of the Istikhaarah is not necessarily that a person sees something (in his dream), or feels pleased, but the most important result of the Istikhaarah is whether a person is enabled to do a given matter or not.