I am assuming the 5% rule relates to any shareholder acquiring a...

I am assuming the 5% rule relates to any shareholder acquiring a 5% stake in any company. when this happens they must declare this newly acquired status to the market via the asx form within a certain time frame. It basically allows all shareholders to know who are the big owners apart from directors. It can influence shareholders mindset due to who is investing in what.

As for shorting it appears complicated but it isn't. Basically there is a buying and selling market behind the general market which involves the ''borrowing'' of shares from someone who owns them. They pay a ''rental fee'' in affect for this privilege to the lender and then hope that the shares go down in value so they can buy them cheaper to then give back the shares to lender and make a profit between the borrow costs to the lender. NFA and correct me if I am inaccurate.

ASX have excellent tutorials on this subject. Puts and calls have a similar affect and can you can learn about these as well.