1. Can I increase the size of the screen the player sees?
Yes.
2. Want to make a side scrolling driving game. The background is a for lane highway and the player controls the car. Any idea how to do this, is there an example?
There are a few ways and different control schemes you can use. You could even have the car static to its X axis while moving it up and down on the Y. You get the appearance of movement with the background and images moving left. There are tutorials available for this kind of implementation. Check out the tutorials section.
3. How can create the opposing cars to be generated at random but on 4 separate paths? What I mean is that a car will be generated on one of four paths.
In my game I had a boss battle that would shoot from random gun ports. I did this by creating a global variable that would randomly change every 3 seconds. I then would have a bullet spawn on the correlating imagepoint generated by the global variable.
I could make your game idea very quickly in C2. You better hop on it before I do it. :D jk
Hit me up if you need further assistance. Also, in my opinion it may be best to get started and ask for help when you get stuck. It makes it much easier to solve your concerns when there is already something to work with.
I would suggest you go through the manual at least once.