1:

The genres are not mutually exclusive.  Thus the sum of the genre
columns is not a column of all 1s, unliked the case of dummies generated
from categorical variables.

2:

library(lme4)
print(length(levels(VerbAgg$item)))

3:

library(rectools)
getInstEval()
ivl1 <- ivl[,c(3,4,6)]
ivl1$prod <- ivl1$studage * ivl$service
print(lm(ivl$y ~ .,data=ivl1))  # y ~ . is OK too

4: 

library(rectools)
getInstEval()
ivl1 <- ivl[,c(3,4,6)]
ivl1$prod <- ivl1$studage * ivl$service
ivl1$sage2 <- ivl1$studage^2
print(lm(ivl$y ~ .,data=ivl1))