(1) Is there a tool that can make RAW Images ?
iRecover can do that. Pick simple recovery mode, right click on USB device and select 'create image file'.
(2) Is there a tool that can recover files from such a RAW Image (instead of from the real disk itself).
iRecover. On that same screen right click in empty space and select 'load image file'.
(3) Can this RAW image be used as a virtual disk ? Do Drive/File utilities also function on virtual drives ?
The open source filedisk driver can be used to do that. It does however not run in Vista (last time I checked). You mean chkdsk etc., if that can be used on the 'virtual drive'? Yes, I believe so, not tried. Documentation does suggest this.
(4) Which are the logical actions and checks that I can perform to restore the FAT32 system (directory) and which utilities can be used for this ?
It may very well be boot sector related in which case you can probably fix using DiskPatch. However that would need to be done on the USB disk, not the image file. If file system damage is more severe it is unlikely you can AND fix it AND maintain the data. Apart from chkdsk there are not tools to fix a damaged file system. And chkdsk may return the file system to a consistent state but if it has to discard data for that it will do so. Also, chkdsk will not work on a RAW file system so before running chkdsk you may still need DiskPatch.
(5) Should I connect the disk to a PC using its USB interface, or is it better to cut through the case and then connect the disk on the IDE controller of the PC. ?
If iRecover sees the disk then it is irrelevant. For DiskPatch preferred is to connect the disk to IDE controller however a modern BIOS can trick DiskPatch into believing it is dealing with a fixed disk (enable USB legacy support). DiskPatch only works with MBR disks, so disk containing a partition table, but I assume your disk meets this requirement.
In general: key factor is, in this case, the condition of the FAT(s). If those FATs are badly damaged, fragmented files are unrecoverable. No matter what you use to recover/fix the disk.
Your imaging idea is a good starting point. Once you have the image, I'd then diagnose with DiskPatch (create support analysis logfile) to get an idea what's wrong with the disk. In addition you may want to run a surface scan with DiskPatch. All these initial steps can be done with the demo versions.