I have sun dried tomatoes from Italy in the original plastic packaging. The label says "best by (one year ago)." Can I re hydrate and make a sauce?

Yes, dehydrated foods are good for almost ever.

Yes.

If there's no visible mold on them, they should be OK, but are likely to have lost a lot of flavor. I don't know what kind of a sauce you're contemplating, but dried tomatoes won't really make anything resembling a regular tomato sauce; people do make various pesto type sauces from them.