A load of good questiones! Here's my best shot at answers ...
Direct drive or pulleys: Some sort of reduction drive will almost certainly be needed for a prop that size.
Why are the bags not deformed? There looks to be some folding back of the bow skirt - right at the tip of the craft. But the general answer is that its a high-pressure bag, which tend not to deform. This is in contrast to the Sev low-pressure bags that are designed to deform, with the subsequent geometry change providing the roll stability.
How is the nose kept down? I presume that the elevator is used. In general, all hovercraft suffer substantial changes in pitch moment as the craft speeds up. This is caused by the thrust (pitch down) and aerodynamic forces on the hull (pitch up) as well as other sources. For the craft to avoid plough-in or trying to take-off, these forces must be balanced somehow. The elevator is one way - it is affective when the power is on, ie ideal for a speed run. Weight shift is another way - perhaps inconvenient though. Another way is the partitioned skirt, which is designed to automatically adjust the centre of pressure to compensate for changes in pitch - this is the best way in my opinion, as it works with or without thrust applied.
Will the skirt abrade? I also wondered that - that is perhaps one of the biggest challenges in this endeavour. At that speed, any contact of the skirt with the ground will heat up the material very quickly and could potentially cause very rapid failure. I presume that the craft has excellent lift and is trimmed very well to avoid ground contact.
Ian