I didn't notice it at first, but, unfortunately, no. This is my one holdback from completely buying into this camera since I'm worried it may severely limit it's macro ability. It has a 3x digital zoom, and they feel that the increased MP's (20 from 14) will allow you to crop and maintain a sharp image. Though, IMO, this negates the MP gain completely, and the DC1400's optical zoom was 5x, so you still can't get in as close even with the digital zoom. On the bright side, this camera will be leaps and bounds better than the DC1400 for wide angle and reefscape photos. Hopefully there will eventually be a macro wet lens available to help on the macro side of things. Honestly, I have never used digital zoom (because it simply enlarges the pixels), and nearly all underwater photos I've ever taken used the optical zoom, especially macro, so I don't know how the two will compare, but I'm hopeful because I love just about every other aspect of this camera, and it still represents a great value.
I doubt it'll be backward compatible, but I don't know for certain. And yes, the battery can be hot-swapped in between dives. I initially had the same concern.