There lots of moderate to high cost ready made solutions out there. Google
"Rotary coupler". They may give you some ideas, but watch out for patents
owned by lawyers.
1 Mbps is pretty high..you need a carrier up at least 27Mhz, which would
be my first thought, since its essentially cowboy territory. Anything
goes below a half watt or so.
Nonsense. You do not need a "carrier" at all. Direct modulation at 1 MHz
will work when you have a decent S/N. It is often called Manchester coding.