Old Norse and Icelandic Vowels

This may be a bit outside the scope of this group, but I've not been able to find anyone who can answer this for me, so I thought I'd try here.

I have three mysteries about Old Norse and Icelandic that I would like to have cleared up.

One is, why is it that Old Norse i-stems like <gestr> and <ferð> have i-umlaut, yet other i-stems like <flug>, <matr> and <skuld> do not (assuming these are all i-stems, of which I'm not sure)? 

Another question is, why is it that in Icelandic, <ó> is a mid diphthong [oU], yet its umlaut is now <æ>, a low dipthong [aI], even though this comes from earlier <œ>, which presumably was a mid vowel, [ø:] or similar.  Why is it that a former mid long front vowel merges with a low long front vowel, yet the mid long back vowel is kept distinct from the low long back vowel? <œ> could have become [eI] very easily, and more expectedly.  It looks to me like the current pronunciation [aI] is a spelling pronunciation, resulting from the graphic merging of the graphemes <æ> and <œ>.  Does anyone know whether this is the case?

My third question is, why is it that <o̜> and <u> are fronted to [œ] and [Y] respectively, but <o> was not fronted?  I can understand with regard to <u>, because [U] is somewhat further front than [u], [o], or [ɔ].  But how was <o̜> pronounced? Wasn't it [ɔ] or [ɒ]? Why would these be subject to fronting while <o> ([o] or [ɔ]?) was not?  Was <o̜> actually somewhat centralized, like [U]?

Regards,

Andrew Jarrette