1.  Currently using dynamic filters on my Waterfurnace E035, but the replacements costs seem to be going up.  Is there another filter I can use besides Dynamic and if so, what are the drawbacks/advantages?

The main purpose of any filter is to keep the coil clean. If changed regularly cheap fiberglass filters are fine. If you want more from your filter go with a pleted merv 8 or 11. Try searching air filters on the internet. You can buy better filters for less on the web.