Do I think I am Black? That's the question I've been wrestling with my whole life.
In Canada I was told that my small amount of Black DNA didn't matter. When I moved to the United States many Black people would ask "I know you're white, but what else are you?" Things got even more confusing when I met my wife's relatives and realized that they didn't look much different from my "white" aunts and uncles. At Santa Rita County Jail I wasn't allowed at the Black or white tables and had to eat with the "others" even though my police report lists me as "white".
Around this time my dad told me about the bigotry he faced growing up in an all white town. He moved at an early age and decided not to tell anyone. People assumed he was white and so he became white. Because he and mom were white my siblings and I were white too.
So on one hand I look white, have mostly white DNA, was raised in white culture, and enjoy the same relative benefits that other whites receive. On the other hand that only happened because of my dad's "passing". I also know that if I had been born about 30 miles south my life would be a lot different than what it is today.
As for your other questions,
Any time I used the word it was either to gain favor with a certain group of people, insult a Black person in the worst way I knew how, or to quote someone else. Whatever the context I used the standard white justifications. "There's no Black people around", "s/he said it was okay", "s/he called me a name too", "s/he said it first", etc. This arrogant reasoning made me lose friends, embarrass myself, get my ass kicked and worst of all, deeply hurt and betrayed some good people who thought I wasn't "like that". I felt cheap, petty and rotten and still feel ashamed to this day. I vowed not to do it again and haven't in many years.
Keep your questions coming. They have forced me to do some much needed soul searching.