You ask ten people, you'll get ten answers, but fwiw my two cents.

1) Give them money. End it in a 1 or 10 (e.g., 1001 or 1010). Weddings are expensive, Indians by and large prefer gold, and, while they should appreciate anything given to them by you, the Native American style will likely be lost on them.

2) A sari is not necessary. You can wear a Western outfit or pick up a nice salwar kameez, kurta, or churidaar. Unless you have a very unusual body style, you should be fine with finding something off the rack. Indians come in all shapes and sizes and many of the outfits are good at hiding imperfections. In Mumbai, Fab India is a good place to start. There are many branches throughout the city. If you do decide to get a sari, the only thing that needs stitched is the blouse, which can be done in a few hours if needed. In any case, you can get one there and it will likely be significantly cheaper and easier than trying to find one in the U.S. Sari shopping can be difficult for a non-Indian, so I recommend taking an Indian friend if you want to know why one is twice the price of another. I also recommend asking the Indian friend to tie it. There are more sari shops in Mumbai than you can shake a stick at, but you will find many shops at Bandra, Juhu, Colaba, or Lokhanwala, or you can go to one of the better malls like Phoenix Mills in Lower Parel. Most stores are open late. Concerning the number of outfits, I would talk to a local for their advice. A lot of the ceremonies like the haldi and mehindi ceremonies are pretty casual and you might look out of place dressed to the nines. I anticipate you will be told that Western duds or a nice kurta would be appropriate for a lot of the events.

You are indeed lucky. Enjoy the wedding and your time in India.