I'm very newb to the RouterOS. So please bare with me.
Here is a picture part of the network topology where I am planning to put the Mikrotik CRS305-1g-4s+in. All it will be doing is routing internet traffic on a 500Mbps symmetric fiber for about 400clients. No BGP/OSPF/etc... we don't have any static IPs.

All the heavy lifting will be done on a DX010 (Tomahawk) as the core L3 switch, SVI and routing table will be there.

Question #1 - Will the CRS305 be able to handle this traffic? no services will be running on it other than NAT and firewall.
Question #2 - Will I gain any benefits if I use the bridge function. As you can see in my diagram, I am only using SFPPort 1 (WAN) and SFPPort2 (LAN). I was going through the first time configuration guide and that's what it said to do. But not sure if it will make any difference or draw backs
Question #3 - Since I am using POE to power the router/switch on ether1, I like to only use that port as the management port which is our VLAN254 (10.0.254.0/24). looking at the interface tab for Vlan there is a check box for "Use Service Tag" what does that exactly mean?

Why would you use a switch for routing? Quick answer, No!

Check this:
https://mikrotik.com/product/crs305_1g_ ... estresults

The reference for an approximation of "real life performance" is "Routing 25 ip filter rules" for 512 bytes package, which for this model is 269.9 Mbps, so, no, it seems to be underpowered for your intended use (nat/firewall).

It was a left over unit we found, since it can run RouterOS we figured we can use it another site that has a failing port on a router.

We'll go with more reputable brand. Thanks for the advice.

Reputable brand? Nothing wrong with Mikrotik Routers, the RB5009 is an excellent router for your situation.
If you meant a router, vice a switch, that is not brand, that is form following function, procure and use a product for what it was intended to do!