David- As stated earlier the Charleston Harbor Bar is closer to the coast of South Carolina than 11 miles. Again, the orders were to rendevous; from the position stated Fraunce would have been able to see shipping for a considerable distance, then making the decision to join up, fight or run. Intended station means a position close to the bar.
Fear would not be a factor in Fraunces decision to stand off in this situation, caution would. He would not holding the position he did if he exibited rash judgement. Coastal Artillery of the time (11")had range enough to reach him, had such been in place.
No, Fraunce had no hesitation on firing a shot across the bow of what he supposed to be the unarmed merchant steamer Nashville, returning from New York.The Baltic was a vessel leased at the spur of the moment to carry Captain Fox, on a mission of damage control due to disrupting orders signed by Lincoln, to the area (along with several selected newspaper reporters).
Fraunce could not have known about the Baltic's mission.
Colors are lowered at night; the intersection of the courses of the Baltic and USS Harriet Lane occured in the predawn period, the twilight zone. Colors are not raised until dawn or so.
Regarding the fourth. Yes, the inclusion of the Marshall House is pertinent in any discussion of those opening days of what is called the War of the Rebellion. Lincoln wouldn't have had much need of an offensive navy had he not forced the South to protect their homeland.