Sometimes they just say Danke or use the more common word order, Danke, nein.
It can but it is all in personallity of the speech. Nein, danke schon would be like saying no, thank you very much. Where as Nein, danke is just no thanks. I personally use what is comfortable to my natural speech. Like do I say thanks or thank you carries over to German as well
Nein is used when answering a question. Nicht is used when you'd use "not" or "don't" in English.
Its so weird that in Punjabi "Nein" means the exact same thing it does in German !!
German is more closely related to Eastern Punjabi (Pakistani Punjabi) rather than the official international version. I personally consider Eastern Punjabi as the original Punjabi (except for their script) despite me being from West Punjab, India !!