I can run league of legends at very high settings at 120-200 fps at max res. Fraps lowers this to 15-30 on any graphical setting.
That's nuts. I have never seen someone take that kind of hit. Try Dxtory or torrent a copy of Camtasia and try them out.
2. What video editing software do you recommend?
Camtasia comes with a simple editor and it renders way faster than any other I have used. That or just get a copy of Sony Vegas.
Is there a size limit to YouTube upload
No size limit as Youtube converts whatever you upload and compresses it themselves but at first Youtube will limit you to below a 15 minute length. They will lift this after a few uploads.