Q1: India is not currently on the ‘red list’. When you arrive in England you must travel directly to the place you’re staying and not leave until 10 days have passed. You are allowed to stay with friends; you must quarantine in one place for the full quarantine period, where you can have food and other necessities delivered, and it must be at the address you provided on the passenger locator form.
You should avoid contact with other people during quarantine. This typically means staying in a separate room from other people, and ideally avoiding use of shared areas such as bathroom/kitchen.
Q2: There is no ‘ideal duration’. You need to demonstrate that you are a genuine visitor who will leave the UK at the end of your planned stay. Typically that means that your reason for visiting makes sense, you have sufficient funds to cover the likely costs of the trip (and that cost is in proportion to your financial circumstances), and you can prove a compelling reason to return to your country of residence. https://www.gov.uk/guidance/immigration-rules/immigration-rules-appendix-v-visitor
Q3: No-one can predict your chances, however the fact that your previous application was approved is a positive sign, unless your circumstances have significantly changed since then.