Java - Executable JAR? Easy Decompiling?

You can do that, if you want. In Oracle's Java Tutorials you can read about creating executable JAR files: Packaging Programs in JAR Files

Any kind of program written in any language can be reverse engineered, so regardless of whether it's Java or not, you should never hard-code passwords. With Java byte code it's fairly easy to decompile.

More than 10 years ago, when Java was still young, it was relatively slow compared to languages that are compiled to native code directly such as C or C++. However, many advances have been made in the Java virtual machine over the years, and the performance of Java programs is comparable to C++ in many cases. People who still complain that Java is slow aren't up to date or don't have a lot of current experience with Java. Java is certainly fast enough, as you saw from demos with jMonkeyEngine. However, for commercial 3D graphics games, C++ seems to be the traditional de-facto programming language that's used. Note that to squeeze the last bit of performance out of the hardware, you'll need to write code specifically for that hardware. Java isn't the right tool for that, as it's designed to be platform-independent.

That is an option. It's certainly not mandatory, you can load resources from external files as well.

That's true. The common architecture for such an application is to put an application server in between the clients and the actual database. The application server that you control is what knows the database password. It only exposes to the clients the operations that they are supposed to be allowed to perform.

Minecraft is written in java, so QED. You won't likely be pushing the limits of modern GPU performance with a game written in Java, but that isn't the goal of every game.