1.) Neither trolling nor flaming are acceptable. Both are punished. Trolling, however, can easily look like someone having a bad game, and Riot wants to be very sure to not punish any innocent players, so these cases often require a manual review. Unfortunately this does mean that players who troll can slip by longer than they should.
2.) I don't really have anything to say about this, as i don't play too many multiplayer online games. I would be surprised, though, if League is the only game that doesn't tolerate flaming, as flaming really does make games unenjoyable.
3.) I'd say it has. In the 6 years that I have been playing this game, I have personally noticed a decrease in those who flame in chat.
4.) Simple, you report them and let Riot handle them. As stated before, even though it can take a while for some trolls to be banned, Riot does indeed ban them.
Plus, you are certainly allowed to talk to them in chat, but you are not allowed to flame them. Flaming trolls will solve absolutely nothing, and it only adds to the negative environment.
5.) I wouldn't say so this is making League into a child's game. If someone is bothering you in game, whether it's through chat or trolling, the mature response would be to mute/ignore them and report them after the game if you feel it necessary. Flaming and harassing them is more of the childish response, imo.
Now don't get me wrong, I'm not saying that you shouldn't be angry with such players, as that is completely understandable and acceptable. What I'm saying is that you shouldn't bring that anger into the game chat and add on to the negativity by taking it out on them.
A few side notes:
if someone flames in my team all i have to do is mute him
The mute button is not an excuse for you to start acting like a jerk. If someone feels the need to mute you because of what you're saying in chat, then it's very likely that you've already done something worthy of a report, and they have every right to do so.
The mute button is there so that someone doesn't have to deal with you for the remainder of the game. The report button is there so that players in future games won't have to deal with you and bother muting you in the first place.
League Of Legends is one of the few games who has this intolerance to adult language
Riot has nothing against us using adult language in game, and as such it alone is not punishable. However, when you're using adult language to start acting like a jerk towards others, that's when the problem occurs.
"Fuck. Sorry I missed that skillshot" -- Acceptable
"You fucking suck for missing that skillshot" -- Not acceptable
It's not about the words you use, it's about how you use them.