Thanks a lot Manoj,
Your suggestions seem to answer my question no.1 and 3 so, my understanding is correct. Max shear stress will be used for either material fatigue or failure estimation as per your anwswer.
How about my second question? Is there any signficant meaning of 3D max stress ? In fact, it is my colleague's concern (who works in the maintenance division). His concern is why 3D max stress is more than the allowable stress.
Still waiting for the answer form other experts making me for clarity.
Thanks and Regards