align multiple choice box all the way over

Your best bet here.. both for appearance and to fit the available space is to go with the default "top label" option for this form. That always works best when you're dealing with limited horizontal space. You'll find that option in the form settings panel.

If you're using the top label option, then you can apply one of the CSS Ready Classes to the 3rd set of radio buttons to align them horizontally. Try using the "gf_list_inline" ready class on that field and it should do exactly what you want.

http://www.gravityhelp.com/documentation/page/CSS_Ready_Classes

If for some reason you're married to the cramped left label look, then you're going to have to target each of the specific label elements, lists, etc. and do quite a bit of CSS manipulation to tweak everything.

Take the "gf_left_half" class off that field and the labels will span the form width. They're being constrained by the class you added.

Also, I don't see any difficulty changing to the top label. Check out my test.. swapped the form to the "top label" option, applied the "gf_list_inline" Ready Class to the 2nd and 3rd set of radio buttons and then added one additional rule to the CSS to add some padding to the left so the form aligned properly in the space.

[css]
body #gform_wrapper_1 {
    padding: 0 0 0 6px;
}

Here's the result: http://bit.ly/neOWrg

You could always tweak the vertical space between the list items. They're inheriting some additonal margin rules from your theme but you can override that if you use proper CSS specificity when targeting the element. You can find examples of how to do that here.

http://www.gravityhelp.com/documentation/page/CSS_Targeting_Samples

Try adding these to the end of your stylesheet. They should tighten up the vertical margins/padding for just this form.

[css]
.sidebar-widget #gform_wrapper_1.gform_wrapper ul li {
    list-style: none;
    padding: 0
}

.sidebar-widget #gform_wrapper_1.gform_wrapper .gform_footer {
	padding:0
}

.sidebar-widget #gform_wrapper_1.gform_wrapper ul.gfield_checkbox,
.sidebar-widget #gform_wrapper_1.gform_wrapper ul.gfield_radio {
	margin:0
}

screenshot: http://bit.ly/nIK1vA

Yeah, you should be able to hide the email field with conditional logic the same way you're showing the phone field.. if Phone is selected -> hide the email field. It's not actually replacing anything, just showing and hiding the fields for the same effect.