1. How do I reply to negative feedback?

Personally, I wouldn't reply to the feedback, especially if you are even considering sending a feedback revision request.

Additionally, I would be reducing the postage on your similar listings to $4 and increasing the start bid by $6.  If a buyer is happy to part with $20 for a book they will still bid if your start bid is $16.  You can even put in your listings "If you win this item at the opening bid amount you will have a total spend of $20 including postage."