Hey Steeds, welcome to the forum.
In regards to your questions, here's my answers:
1. The same thing you do at home in summer, drink, watch sport on tv and have bbq's. There's also a lake for wakeboarding, etc, a beachfront and a frisbee golf course. Plently of mountain bike tracks too.
2. Queenstown has a great nightlife scene, so grab a Source when you arrive, and check out our
gig guide.
3. There are a lot of happy hour promotions run across the various bars and clubs, and the specials aren't too bad. There's some of everything and ranging lots in price. Turkish Kebab's are great too, or Fergburger.
4. GST is already factored into all pricing so there's nothing you need to look for there. Currently the Kiwi dollar is sitting at 79 US cents, the highest it's been in 22 years. I don't know where you're from, so I can't do your local currency.
5/6. January is when summer finally arrives in Queenstown, so temperatures will vary from about 10 to 35 degrees celcius, and it's light till late.
7. Plenty of hostels in town, and rates vary from $20-30 NZD. It gets busy in summer so it may pay to book in advance.
So yeah, the above is quite brief, so feel free to ask more questions. I hope it helps!
Nathan