1) Grappled characters cannot (usually) share squares, though they must be adjacent to each other or the grapple fails. So no on this point.
2) This is fine.
3) A readied action allows only a single standard action (or move, quick, free action). You cannot make 2 attacks with a standard action. Rogue would be better off to delay till right after the monks turn and attack from a flanking position. Rogue could ready to make a single attack vs a pinned target.
4) Only of if you can find some way around the issue with #1.
A further note on readied actions, you can set the trigger for a readied action off of any perceivable stimuli. Eg, I ready to attack after the barbarian makes two attacks in a full attack action, but before they make their 3rd attack. Triggers don't even have to be based off of another characters actions (though they usually are). Eg, I ready an action to cast a spell if that burning building falls over.
It's not very different than the 5ft step and then get 7+ attacks as a two weapon fighting ranger/fighter to be able to start within 5ft range, and then have to succeed at 2 grapple checks to just take someone ~95% out of a fight (vs likely completely out of the fight when you can hit them likely 4-7 times a round). And then there's ranged characters and casters that don't even have to micromanage a move action to be within range of murder.
I did it wrong then; I allowed the rogue to take a full attack action on her readied action, so 2 attacks instead of just one as it should've been by RAW. The reason she readied on the Pin instead of setting up a Flank is because the AC penalty to the undead was pretty high when pinned (-4 AC vs a +2 flanking bonus) so she wanted the maximum chance to hit.
Otherwise though it sounds like the grapple part was right. The monk can grapple adjacent, pin with greater grapple, then after the readied action can release the grapple as a free action and 5' step into that flank.
I only started questioning myself in all this when my monk player emailed, said he was looking for a feat to keep his AC while pinning foes so he didn't have to always do the free action thing. I told him Grabbing Style was the way to go next level, but then I started rethinking this whole combat round. Thanks for the clarifications!
The only other issue I see is what bbangerter stated that Grappling does not cause creatures to share a space, but causes them to become adjacent to each other. You can move a creature into a valid space after a successful maintained grapple, but the only creatures you can move into your space as part of a grapple would be those that are 2 sizes or more smaller than you, or if you are both at least small. So the Rogue would have had to move into range before the pinned condition occurred.
On to the monk and not gaining the Grappled condition, the best way I know is a single level dip into White Haired Witch. They have to use Int instead of strength to perform the grapple, but they will gain all other bonuses from feats.