Can a freezer be set too cold? Mine is at −25°C and I am not sure whether that is better or just expensive.

−18 is not arbitrary and it is not really a food-safety number in the way people assume.

Microbial growth has already stopped well above it — nothing meaningful grows below about −10°C. So −18 is not "the temperature where food becomes safe". It is the temperature at which the chemical and enzymatic reactions that ruin quality — fat oxidation, colour changes, texture loss — become slow enough that food keeps for months rather than weeks. It got standardised internationally, and once it is on every appliance and in every guideline it stays.

Which answers question 3 in a slightly disappointing way: colder does keep improving quality, but with rapidly diminishing returns. Going from −12 to −18 is a big difference in how long something stays good. From −18 to −25 is a small one, and it is smaller than the difference made by how well the thing is wrapped.

There is a real downside beyond electricity, and it is the one nobody mentions: colder air holds less moisture, so a colder freezer dries food faster.

Freezer burn is not the food freezing too hard, it is water leaving the food and refreezing on the packaging as frost. The drier the air in the cabinet, the stronger that pull. At −25 in a frost-free unit — which deliberately cycles warm to defrost, then re-dries the air — poorly wrapped food will develop freezer burn noticeably faster than the same food at −18.

So the answer to question 1 is: the cost is electricity plus a mild penalty on anything not sealed properly. In a chest freezer without auto-defrost this is much less of an issue than in an upright frost-free one, so your setup is the forgiving case.