A peer reference cannot speak to supervision, so it should speak to collaboration: how they handled disagreement, deadlines and shared work. Say clearly that you were a peer rather than a manager.
Generally no, unless your contract or local law requires it. If you do give one, it should be accurate and fair — inaccurate references can create legal exposure in some jurisdictions.
Decline, or provide only the factual confirmation of dates and job title. A deliberately lukewarm reference is understood as a negative one by everyone reading it.
Yes. A reference without a verifiable contact carries very little weight.