SDC handles the activation on new installs so you wouldn't get the activation dialog unless it failed. You're allowed to activate it on a limited number of machines, because we know that people install it on both their laptops and their PCs.
No, you don't need to be connected to the internet to play once it's activated.
I don't know if the activation code will be part of the release, but I just checked and SDC will archive the activation record if you tell it to archive the entire application, so that when you reinstall windows and restore the archive, it should just work. Moving it to a new computer probably wouldn't work, but if necessary you can contact support for help activating it on the new computer.
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