1. The allotment letter to the seller is not the title document, the seller is not having a clear and marketable title to the property.
The seller cannot execute the registered sale deed in your favor on the basis of the allotment letter or a notarised agreement, therefore you cannot acquire title to the property without a registered sale deed.
If you do not have title to the property then you are not the owner of the property hence the constructed property also will not belong to you at any point of time and you may have to vacate the property if ordered by court in a dispute by the legal heirs of the vendor.
2. The electricity connection cannot be changed to your name on the basis of the notarised sale deed.
3. No, read the 1st answer above.
4. With the documents mentioned by you, there is no legality for the title to the property.
5. You should first insist on a registered sale deed in the name of the vendor which is the basis by which he can transfer the property to your name by executing a registered sale deed.
6. It is not advisable
7. see the above answer.