What is WordPress?
WordPress is a website platform with extensions for everything and an extremely customizable core. It is no longer just for blogs.
Is it free?
WordPress and every extension and theme is free.
All WordPress extensions and themes come with full source which you can modifyto suit your needs. This is like the GNU license agreement: you can do whatever you want, you just can't charge for it.
But some sites charge a subscription fee
Sites like WPMUDEV charge for access to their collection of extensions and themes, but they do not charge for the extensions or themes themselves.
Once you have an extension or theme, you can give it to anyone or do whatever you like with it.
Why is just /%postname%/ not recommended for performance reasons?
A sanitized version of the title of the post (post slug field on Edit Post/Page panel). So “This Is A Great Post!” becomes this-is-a-great-post in the URI (see Using only %postname%). Starting Permalinks with %postname% is strongly not recommended for performance reasons.
Explanation of different permalink options and performance tradeoffs