They serve different roles:
The preposition á here indicates a static relationship (“on the cake”), which selects the dative.
Kaka is a feminine noun. Its dative definite singular is formed by adding -nni to the stem:
Yes. Icelandic verbs encode person and number, so you can omit the subject pronoun if context is clear:
Not quite. If you want a genitive construction with um, you’d say um verð kökunnar (“about the price of the cake”).
um kökunnar verð is unidiomatic because in Icelandic the head noun of a prepositional object normally comes immediately after the preposition.