And did other writers of that time use that in theatre? Also did the audience understand iambic pentameter or not?
No, Shakespeare didn't invent iambic pentameter. It's been in use in English at least since Thomas Wyatt, who wrote the first sonnets in English.
Yes, his contemporaries mostly also used iambic pentameter in plays; see this example from Christopher Marlowe's play Dido as an example: http://www.perseus.tufts.edu/hopper/text?doc=Perseus%3Atext%3A1999.03.0006
I don't know the answer to part 3, except that we know the plays were really popular, so probably people understood them at least enough to enjoy it.