Yes, baking will be implemented.
Yes, you can use physics based motion. You can control your agents yourself. Your agent position should not be too different from one provided by navigation though (obviously) or navigation errors will be produced resulting in jerky motion. But common physics based motion using forces/impulses and root motion and vehicle motion work fine.
The only direct control method provided is direct setting of coordinates, otherwise you just recieve signal for positioning and handle it yourself.
Mesh density is a balance between quality of motion, and speed. The big squares you see are tiles, so actual navmesh density on the example is low. Tiles can be added/removed/rebuilt on demand.
As I finish adding basic recastnavigation features like tile cache, navigation areas and offmesh connections I will create video demonstrating the features.
Currently it all is used via script, no editor helper nodes are implemented,
as I will complete all basic features, I will add editor helper nodes for crowd and implement navmesh baking.