The real reason is that we don't have one-person aircraft that can stop and hover with <300ft stopping distance and is under 10 ft wide. Helicopters come close but they're expensive and I'd hate to see parking for such a model of transportation.
Helicopters aren't really allowed to fly over most areas in cities though, except for police and other emergency helicopters. The noise and danger make it a no go, even if they were smaller.
Helicopters can fly wherever they want, barring the same restrictions that apply to fixed-wing planes. For the most part, there aren't really any helicopter-specific restrictions.
Yes, but this doesn't really help the case for flying cars either way.
Edit to clarify: Presumably you'd want to land your flying car almost anywhere in the city; this is not going to happen anytime soon, for the same reasons that helicopters and planes can't.
