Re: GLD, it's an SEC regulated security. It's government regulated, just as much as the gold in Fort Knox would be regulated if your dollar bills gave you claim to it. If you trust the government to hold gold, you should by extension trust a government-regulated security to. Let's keep conspiracy theories out of this.
(2) I'm not sure where you get the idea that it's illegal to transact in gold. It's definitely legal, and it's done all the time, it's called barter. You're still going to have to recognize the transaction in US dollars and pay any capital gains associated (or deduct capital losses, if applicable). There's even some cases where bartering can allow you to defer capital gains such as a 1031 exchange (which was wrongly applied to cryptocurrencies as they're securities).
(1&3) I'm not sure you're really trying to make it work. You could easily do monthly net settlement, where you use a credit card to make all your usual payments (an interest-free loan), then at the end of the month, sell GLD shares to cover any shortfall from your salary, or buy GLD shares with the excess of your salary. If inflation is as crazy as you say, this would give you an advantage as your gold value would go up while your debt is denominated in fiat "funny-money" inflating away.
(4) The intrinsic lack of connection between bills and physical goods isn't what leads to volatility. The bulk of gold's value is just because people find it shiny, it's actual industrial or useful application is tiny in comparison. You're believing in the value of gold is the same as my believing in the value of the dollar. Yes it's been used for thousands of years, but so what? We used rocks to represent money for thousands of years on islands, but nobody's suggesting a rock-backed dollar. Backing is inefficient and unnecessary.
Each of the things you say lead to volatility (fractional reserve banking, increasing the money supply, etc) is social policy built on top of monetary policy. Rolling back Glass-Steagall causes volatility. You can just outlaw those things and achieve the exact same results without having gold backing your currency.
I have faith I can exchange my dollar for a half a loaf. You have to have faith that you can exchange your dollar for a fraction of an ounce of gold from a locker and that someone else will exchange your shiny fraction of an ounce for a half a loaf. It's one extra, unnecessary layer.
Here's a writeup from a gold-standard man like you for why inflation is a bad argument for the gold standard, and you'll find it very largely mirrors what I've been saying to you: https://www.forbes.com/sites/keithweiner/2014/03/11/inflatio...