Transverse can travel through solids(but not liquids and gas) and longitude can travel through any matter.
The dry ice absorbs heat from the air in the flask and become CO2 gas directly. So the heat flow from air to dry ice. And the CO2 gas increase the amount of the air. Though the temperature decreases, the balloon still inflates.
System to surroundings since energy is released in an exothermic reaction
Sunlight is the requirement of every single natural process on Earth.