It is located in the interior of the bone. Particularly in the Proximal and Distal epiphyisis
If by the spongy bone you mean bone marrow, it makes blood cells. There are three types of blood cells; red blood cells, white blood cells, and platelets.
It looks like sponge but it's the calcium in your bone
Spongy bone is calcified and hard. It is named for its spongelike appearance.
Yes. Spongy Bone is dense and does contain bone marrow.