Most clubs have offset so yes, lining up the toe and the hosel together will cause the face to be slightly closed (assuming you aim at what you think you're aiming at in the first place @nevets88 ).
The leading edge on most modern clubs is slightly rounded so if you are looking for a straight line to aim with, the grooves are definitely the way to go.
Too many variables to account for. Theoretically you change your face to path relationship and generate a different ball flight, but that's assuming you don't start aiming differently on the course because the club is pointing in a different direction than you are used to or something.
My personal preference is to aim the face at address at the line I want to start my ball on, not on the actual target itself.