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It means that the probability distribution function of the variable is the Gaussian or normal distribution.
No, the normal distribution is strictly unimodal.
The normal distribution is a theory, which works in practice (with a large enough sample). E.g if you were to plot the height of everyone in the country, you should end up with a normal distribution. Hence it is not usually considered hypothetical, in the same way that, say, imaginary numbers are hypothetical.
Yes. When we refer to the normal distribution, we are referring to a probability distribution. When we specify the equation of a continuous distribution, such as the normal distribution, we refer to the equation as a probability density function.
No. Normal distribution is a continuous probability.