Seller isn't responsible for import fees in foreign countries, they are the buyers responsibility

This is a blanket statement added by Etsy and doesn't apply to non EU sellers, hence 'where applicable 'refers to country location of seller rather than the transaction itself. It would be illegal for a non EU seller to collect such taxes

No as a seller you cannot put a lower value on the customs form , not only is it illegal, but if the parcel goes missing then your insurance doesn't cover the true amount

No the gift is between buyer and friend, not seller and buyer

Royal Mail mark the parcel as being delivered but it is likely that it is being held at the local postal depot. You should have had a grey card delivered (like the more usual red card) with instructions If not contact the local postal depot.

Either in person or online.

The parcel will be returned to the sender after 21 days