The cancellation line tickets go on sale for whatever price they were on sale for. As the guy who works at the theater says you could potentially get one of the $50 mezz tickets but "that is like catching a leprechaun". If the ticket cancelled is $177 that is what they charge, if is is Premium, that is what they charge.
If you are the first in line and ticket is premium but you don't want it, they will ask the next person in line, but you can stay in line in the hopes one of the $177 tickets become available.
They may not end up having any tickets and they have no control over when they are sold. I have stood in line a few times. Once I was the first person in line and they didn't have a ticket until 8:02 for an 8 pm show time. I was with a friend once and she was the only one to get a ticket, but once i did the line and like 10 people got to buy tickets. I would say Matinees or shows with Javier are the better bets.I say this because the day i did the cancellation line and they sold about 10 tickets it was for a Javier show and some people got upset once they were inside that Lin was not performing and made a stink so the box office facilitated the resale of the ticket. I think they missed out, but a bunch of people got to take advantage of this!
The accept cash or credit, unless in the circumstance above they could only take cash for those resale tickets so I was unable to get one of them because I only had a card.
As far as ticket quantities as long as you are in line you can get as many as want (according to the guy inside) so if you want 10 tickets you can wait for ten, but once you buy a ticket if you leave the line you are done. When you line up the guy tells people that only one person needs to stand in line. Which is great because then you can switch out, which makes also entering the lotto a possibility, but I would warn that they take the line business seriously. One of the times I did the cancellation line the person in front of me and her friend were hoping for two tickets. It was right at curtain time and a ticket became available so her friend that had been in the line bought it and went in. her friend stayed behind in her place and then another ticket became available and she was going to buy it but the guy wouldn't let her because she was not the one that had been waiting in line so he offered it to me (But it was one that needed cash so I couldn't). So if the friend who had been in line bought the first ticket and then stayed in line she could have bought the second ticket. So i think splitting up is not the best idea.
They do monitor the line and work hard to ensure no cutting goes on which I think is amazing, but make sure you are prepared!