The quota is not recalculated for the following reasons:
1) vote exhaustion comprises such a tiny fraction of a percentage of the total votes that it is unlikely that, should those votes have flowed on, the result would differ.
2) recalculating the quota would result in either:
a) a disadvantage to candidates excluded earlier in the counting if the recalculated quota was not applied to counts prior to the vote exhaustion.
b) a recalculated quota applied to counts prior to the vote exhaustion potentially resulting in the votes not being exhausted in the first place (depending on the reason for the exhaustion).
Now on to your actual questions:
1) There is nothing in the Commonwealth Electoral Act 1918 which specifies the counting method, though there are sections on what constitutes a formal vote.
2) It's less a matter of easier than it is a matter of fairer. See above for some reasons why recalculating the quota could lead to unfair or conflicting results. Thus quotas are never recalculated between counts, but the actual quota can only be determined when the total number of formal votes is known. Before then the AEC may publish a "provisional quota" which gives people an idea of what the quota may be, but it is not the official quota.
3) Again, see above, it is theoretically possible depending on what might happen with a recalculated quota determined by vote exhaustion.
And from the comments: KJ, a below the line ballot may still be counted if 90% or more of it is completed with three errors or less (and here's the tweet that proves it, full details are here with examples). If the AEC can determine that much of the ballot they will attempt to count the vote.