1) You can likely transfer this "in kind" into your RRSP account. You will need to check with the institution that is holding it for you, but that is likely the way to do that.
2) The GIC matures and then you are holding cash in the RRSP account. Alternatively the funds are re-invested in a 5 year GIC. (In other words if you do nothing at the end of the 5 years than most banks will roll the old GIC with interest into a new term).
3) It depends on where/ what kind of account you have. You could buy a bond fund if you already have mutual funds, or you could be in an account that already allows single securites and be able to buy individual bonds if you want. Otherwise you would have to open another RRSP account and buy the bonds there.
I don't know your situation at all, which tempers what I'm about to say: The time for bonds has likely passed for this cycle. Interest rates have fallen by 3/4 point already and that is when bonds shine. (In a declining rate environment). I have clients who have made a fair amount of money in this environment, but that is based on the currency and the declining rates. Over the longer term interest rates will rise (we are at historical lows...so I'm not exactly going out on a limb here!)
Anyway, sorry to add the unsolicited advice, but I felt compelled to say something! If you have other questions let me know and I'd be happy to help.
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