Believe me, spending 500EUR banknotes is the smallest issue you're going to face. There are so many ways to exchange it to smaller banknotes including deposit ATMs, bank branches etc.
That must depend on your country. Here, even 100 euro bills are often refused. I don't think banks will exchange them either, they don't earn from it and many banks here don't even have a cash register anymore.Quote
Large cash purchases is also not a problem. There are sellers and companies ready to do everything to make some profit. You can buy a $100k car with cash for example without an issue. The dealer will think of a way to do this. You certainly need to do research in which countries it's possible, in some countries you can get in trouble! 
Even if you find a car dealer who sells you the car, it needs to be registered, which means you can get questions about it later. And if the money didn't come from a clear source, you can't explain how you paid for it.This reminds me: Al Capone got caught on tax fraud. You may get away with it, but I wouldn't be comfortable taking the risk.
Impossible. Euro is legal tender in the EU. The only reason they can refuse is because they have no smaller bills handy or some other technical reason. Otherwise, they're breaking the law and you can report them.
Regarding vehicles, yes you need registration. What many people do to "optimize" taxes is register it under your company/business (if you own one). If you live in the Netherlands for example, you can register a business in Belgium etc (not sure about these exact countries just mentioning them as an example). There are so many tricks allowing to circumvent the laws we can't even imagine.
