I've always contented that Michael had choices at every stage of his life, and always chose the gangster way.
Yes. Moreover, I don't think that there's anything, in either the book or movie, that hints that Michael thought that there was anything wrong about gangsterism. It was old-fashioned or inefficient, but not wrong - or at least not any more wrong than politics or business.
I don't think Kay had any clue what she was getting into when she married into the family. She had very limited exposure to them before marrying Michael, that we know of. We were only shown her presence at Connie's wedding, and then the one trip out to the mall when Michael was in Sicily.
I think the exchange where Michael tells Kay about his father and the bandleader is a seduction scene, Michael pausing every so often for Kay to ask for more, and Kay asking for more each time. I don't think that she wanted to know all the details, but I do think that it was a turn-on for her to be connected to that life.
