Will a degraded battery heat up more?

So unless my battery needs replacing, I wouldn't have to worry about these issues?

You don't need to worry about anything.

For my battery currently at 82% capacity and "normal" reading, will it heat up more vs when it was around the 1st year of purchase?

Yes.

And for the time that a battery needs to be replaced, is it actually 80% capacity? or is it something like 70% or 75%? Is the 80% capacity just mean it needs to be recharged more often, but not that it needs replacing? So it might need replacing when it hits 80% or lower than 80%?

It might need to be replaced at any time. The percentage does not matter. It matters only for warranty purposes.

Also, even when a battery is at 70% - 80% capacity, would it still run fine? Like aside from a decreased capacity, will it still run normal?

Yes, as long as its status is "normal".

Will always plugging in my mac while using actually increase the battery lifetime?

No. You have no control over that with newer Macs. It's one less thing to worry about.

One final question, if my battery capacity is below 80% but it shows the battery is "norma" does it still need to be replaced?

No.

or should I only replace it either when I don't like the current capacity or it says "replace soon" or "replace now"

Exactly. And as I wrote, if you were to take a Mac to Apple with a battery that's working fine, whose status is "normal", and with a capacity equal to or greater than 80%, they might refuse to replace it anyway.

If the battery's status is "normal" that means the Mac it powers is capable of peak performance. When a battery's status indicates "service recommended" it is still performing normally, but you may want to consider replacing it.

Nothing dramatic occurs when its capacity is reduced from (for example) 81% to 80% or 79%. There is no need to replace a battery prematurely. Apple might not even agree to replace a battery unless its replacement is justified, whether you offer to pay for it or not.

Check the condition of your Mac notebook’s battery - Apple Support

If the battery's status is "normal" it means you don't need to do anything. You certainly don't need to worry about it.

As a battery ages chemically, it requires more time to recharge, and the total amount of heat produced is greater. Internal thermal monitoring circuitry prevents it from charging too quickly.

A battery in need of replacement will limit a Mac's performance.

And is the battery more known to cause software and hardware-related confusion/issues with an old battery?

I do not understand that question. An old battery won't work well.

Like battery swelling, inaccurate percentage readings, unable to charge, overheating, fluctuating, and false battery health status.

Nothing magical happens at some arbitrary number, but any or all of those things can occur when a battery needs replacement. In addition to them, an aging battery needs more time to charge, produces more heat, and will discharge more quickly than a newer battery.

Nothing works better than a brand new battery, but nothing stays brand new for long. They are wear items, just like the shoes on your feet. When the soles eventually wear out, you can't run as fast either.

Over the course of a Mac's useful life, it's not unusual to need a battery replaced — once. More than once would be unusual. They last a long time.