Piracy: ꜱᴀɪʟ ᴛʜᴇ ʜɪɢʜ ꜱᴇᴀꜱ

Depends. Those are just letters. First and foremost meant to scare you and do something without thinking it through. You can decide to respond, or not respond, that's up to you. Though it's strongly recommended to contact a lawyer before signing any contract with them, admitting to wrongdoing or give them information about yourself. I'd probably try to avoid (5) without legal advise.

If you toss it in the bin, they'll have to decide whether they have enough evidence and whether it's worth the effort to actually sue you. Usually that letter was an invitation to settle out of court. At their terms and conditions, though.

And yes, they're most certainly backed by the media companies. Otherwise they wouldn't have any business messing with their intellectual property. And maybe the law firm only does letters, maybe they have some number of court cases to achieve each month, who knows? Maybe they already exhausted their more promising X court cases this month and you won't hear from them again if you decide to just ignore them. Maybe you're one of the "lucky" few who get sued.