It's annoying sometimes because in order to continue the story you have to accept a quest and complete it, but you don't know exactly which quest to accept.
It's the top one on the list. The one that doesn't have a time limit. :P

Is there any drawback to selling loot? Should I sell everything or is there any reason to keep certain loot items for possible uses in another situation?
You should keep all of your loot for the Bazaar. Some quests need specific pieces of loot.

How many hours does the game take if I did all the missions(400 exactly right?) and did most of the mastering of the jobs and all the sidequests?
Nobody has finished it yet. :P It appears to be incredibly long. Well over 100 hours.