1) Will the 'Agent Discovery' feature use the 'Agent ID' to find the Agent Instance and display it on the Admin console?
[HUBERTs Views] Yes it does.
2) When this Agent ID file is getting created and with what value it gets populated? Will the value be encrypted, if yes how to decrypt it?
[HUBERTs Views] I think it gets generated during WebAgent configuration process. There is no way to decrypt it.
3) Will the ip address be stored in the TrustedHost Object along with the hostname?
[HUBERTs Views] Yes it does store a lot of key information, I'd assume IP to be one of them.