re: Before a directory listing is submitted, can you require payment via paypal?
Sorry, no. Other users use memberships plugins like Restrict Content Pro to manage user memberships. Using a membership plugin gives you greater flexibility in being able to monetize your site. You can use them to limit access to the directory therefore limiting access to be able to submit an entry.
re: Reading the documentation, it looks as though you can require login to the site prior to having access to the form. With that option enabled, after a user submits a directory listing via the form, is possible for the user to edit that directory listing?
Yes, but you need the Link extension too.
Hope that answers your question thoroughly.