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ad 3.) Miejscowe Koło. It can be translated as "local branch" or something like that. It is a local branch of PZKO. This organisation consists of many such MKs located in almost every single village in Zaolzie.
ad 4.) No. The one with diacriticals is in Polish, the second one is in Czech.
MK PZKO Kościelec is official name of this local branch.
I hit it again, but I have two more questions: What is the name of the river that was dammed? When you speak of the different sections joining the village, why don't we see Kostelec?