1) Who or What was Suaron ( Spelling? )
Sauron was a Maia: a lesser diety, if you will. He was originally of the "People" of Aule, the Smith, and thus carried with him a lot of his prejudices and character from that background (incidentally, Saruman was also of the people of Aule and fell prey to the same temptations as Sauron) but was corrupted early on by Melkor. During the first age, Sauron was Melkor's chief servant.
2) At anytime in ME history, could have anyone challenged Suaron's power?
In what way? Without the ring, Sauron was relatively weak. Even with the Ring, his armies were defeated by Ar-Pharazon and then again by Gil-galad and Elendil, when Isildur cut off his finger. During the First Age, he wasn't even the Head Honcho of Dark-lordishness, so certainly he is never presented as a uber-bad-guy.
3) Whats the diffrence between the elves in the Golden wood and Lothlorian? ( Spelling on that one again? )
Nothing. Lothlorien
is the Golden Wood.
4) What is a balrog, Where do they come from and how many are there?
A balrog is a Maiarish spirit, much weaker than Sauron himself, but still very mighty, who was corrupted by Melkor in the early days of the world. They took on nightmarish physical forms, and there you have it. In D&D terms, a balor (perhaps advanced in HD) is a good representation: they really are too weak to be diety level, as "high level" characters like Glorfindel do kill them from time to time. How many there are depends greatly on which version of Tolkien's texts you accept as accurate. There are some early texts that have entire armies of balrogs, while some late texts seem to limit them to nine (or was it seven? I forget) while other later texts are unclear or contradictory. Really, you can get away with almost whatever you want as long as you still make balrogs very rare.
5) What makes a wizard? How many were there?
Wizard is a "translation" into English of the elvish word Istari. The wizards, in this guise, are all embodied Maiar who gave up (or veiled) their power and apparently some of their memory to come to Middle-earth from Valinor as messengers and/or servants of the Valar to help elves and men contend with Sauron. There were only five who came: Gandalf, Saruman, Radagast and the two blue wizards who promptly disappeared into the east, although
Unfinished Tales gives a small hint of what their role might have been there.
However, there are numerous other references to "magic" being used by mortals. Galadriel and Elrond certainly seemed capable of "magic" although, they didn't seem to understand the use of the word the same way the hobbits, for instance, did. Most other "sorcerors" and magic-users described (especially amongst Men) were evil and gained their powers through Melkor. Tolkien even wrote at one point that "magic", as a force that could be tapped by evil sorcerors and the like, was actually the dispersed power of Melkor throughout Middle-earth.