We react to every report, but to what extent is determined by the information provided.

If somebody says "Player A is cheating with Player B!  Illegal Alliance!" and nothing else, we don't really have anything to go on so any investigation would be fairly limited.  It doesn't mean we wouldn't search however, even if just a quick glance at the scenario.

For the most part though this doesn't happen.  People usually come to us with some kind of information that at the very least implies a situation where cheating could be involved.

In those cases, we still assume innocence until we find something concrete that warrants a block.  Sometimes that doesn't happen, and no action is taken despite circumstances where it seems obvious that somebody is cheating.  This sometimes frustrates people because it appears that we allow rule violations, or worse, play favorites.  In reality it's that we put a higher value on avoiding blocking innocent players.

You're free to report as much as you'd like.  If it's doing it for the sake of doing it, it will become clear pretty quickly and the "make work" project would be sorted without much fuss given that the searches would inherently be limited due to lack of provided information.

That's a bit of a trickier thing.  People may hold grudges and retaliate against other players who reported them, regardless of whether or not they actually broke any rules.  This would likely deter people from reporting at all.  If somebody knew they'd get a target on their head for making a report, I could understand why they might choose to stay quiet.