I'm glad you are enjoying CataBlog, here are the answers to your questions.
1. TypeError: $ is not a function
Also keep in mind that regenerate images is for recreating thumbnail and LightBox sized images from the image files found in the catablog originals folder. This means that your originals folder should contain all the image files that correspond to the image and subimages columns in the CSV file.
2. CSV not importing entire file
When you import what does the console say? Does it list each of the 1000 records as they are created? Does it list each category as it is created? Are you clearing the catalog before importing? If it indeed is stopping at a certain item I would triple check the CSV syntax on that line, their is probably an error. Also their is no limit on how many categories are created from a CSV import.
3. Do I have to create one CSV for each category?
No, this is unnecessary. Please refer to the import documentation for an example CSV formatted file. Please make sure you are using the vertical bar "|" for separating categories and not commas ",".
4. Is the order field per category or overall.
The order field is currently for the entire catalog. This most likely will be removed and or changed in a future version of CataBlog, especially since so many people want catalogs with thousands of items in them. Custom reordering a thousand items easily isn't very feasible with any interface.