My responses are:
1. Is it better to use more coils of wire in a small space or spread it out a little.
Wrap it tight. A magnet will induce the same current in a looped wire whether it is tight or loose. Keep it tight to maximise space. Leaving it loose doesn't have any justification.
2/3. Should I have the magnetic wire wrapped around a small type of plastic tubing and have the magnet slide inside the tubing so it is perfectly smooth, Or would it be better to have like a steel pipe with iron in it (wouldn't that make the magnetic field stronger) or something that the wire would be on the outside of and the magnet would slide inside the pipe ( would the magnet get stuck inside, not quite sure).
No, steel would shield the field. Light plastic piping with springs on the ends will suffice. What about plastic bottles split and curled? Maybe you could use this as the coil-former?
4. When I wrap the coil around whatever I decide to use, do I have to wrap it in a specific way (from one side to the other or can I go back and forth over the tube).
Go back and forth. You have a magnet moving in two directions, so in this case it is viable to have the coil wrapped in both directions. If the application was different, as in the magnet was moving in a single direction, you would be best served in looping it in one direction.
5. About the capacitor can you hook two 1 farrad capacitors inline to make a 2 farrad capacitor, or should I just stick with the battery.
See Phasor's answer to this, but one thing I am unsure about is where the decision to go with batteries or cap's is defined. I think that as cap's are lossy in general, batts are better for retaining charge. Go with the caps.
6. Can I have multiple coil in a flashlight with multiple magnets, or would it disturb the other magnetic fields in the light.
Yes, by all means. Your task would be to generate as much magnetic flux as possible, so multiple coils, multiple magnets is cool. Just watch for losses when you try combine all these voltages... some will produce higher voltages/currents than others, and a poorly designed system will loose the benefits of this. I don't know what method would be best to achieve this... maybe a real EE will be able to comment!
7. Since the flashlight is going to be magnetically charged it is going to have A.C. current. Is that ok or do I have to use something that makes it direct current only
Yes, but you have already grasped this... (see phasor's answer). I personally think that germanium diodes would be better suited as they have a lower voltage drop (0.7 for 1N4001, but somewhere in the region of 0.4 for germanium, I think) so you will loose less energy!
And my final comment... lets see photos of the project as it runs!!
Best of luck.