Lasting 20 years?!! 

I have installations from 1990 still going strong till today 

As mentioned if the cable/wire is operating hot at 70C. This is based on electrical engineering formulation. I believe it is more on insulation based on  Arrhenius equation.

The rating of the MCB is to protect the cables that are connected. So for example a 2.5 mm² cable has a rating of 24 A**, then the MCB should be not be 25 A, but 20 A.

1. Yes, must change to RCBO, or add RCCB with the C32. If wire is 4 mm² can maintain C32, but I would strongly suggest C25. (Maximum 5700 W water heater with C25) If the wire is 2.5 mm², then technically you already cannot use C20 as Suruhanjaya Tenaga say cannot use 2.5 mm² wire for water heater. Realistically the water heater won't be at maximum heat, so you can get away with a C20 RCBO. (My own instant water heater with rain shower and warm enough for me draws ~16 A measured)

2. Again mainly depends on the wire size. You should also look at the rating of the appliance. For 3500 W, then you would have about 16 A at full cooking power. So, going down to a C20 would be safer no matter the wire size.

3. It does sound extremely oversized. Most hoods are less than 1000 W, so a C16/C20 would be fine.

My own unit:
Lighting 1.5 mm² MCB C10
13 A socket 2.5 mm² MCB C16
A/cond 2.5 mm² MCB C16
Water heater 4 mm² MCB C20+RCCB 10 mA -or- RCBO C20 10 mA
Specialty appliance 4 mm² C25 (Oven for example) Edit I have a row of 3 x 13 A sockets at my kitchen counter. I can foresee myself using an air fryer and an induction cooker while boiling water at the same time. Individually they are not more than 1500 W each, but collectively to the looped sockets it is more than C20. Hence the wire feeding these looped sockets are 4 mm²
Note that ST says air conds are to use 4 mm² wires, but I think that is absolutely overkill as a 2 HP a/cond is at maximum 2000 W (~9A). So I don't follow ST rules to the letter. I'm okay to match the MCB to the wire to the power draw of the appliance.

** This rating depends mainly on the heat that is produced when the wire is flowing the rated amperes. This 24 A is the rating at best case, when the heat can dissipate from the cable. Make that situation worse, by burying that cable in the wall, run 3 phase together, run lots of wires together, etc, and that rating will reduce.

Thank you again for your suggestion. 

#1 Finally managed to get one willing electrician (most don't bother a small job like this, dunno why) who agreed to do this.  It was quite a tedious job to replace MCB to RCBO, not as straight-cut as I thought it to be.  He had to find the correct neutral and get it hooked up to the RCBO.  And he too confirmed the heater wire is 4mm². 

#2.  He is in the opine that I should keep it the C32.  Wire size is acceptable to him - matching the C32 requirement but because I'm not sure the original spec of the induction cooker (one induction, one highlight ceramic) he would recommend me to keep it that way.

#3.  Changed to MCB C20.

For all the changes, he took out the wall switch and inspected all the wires in it too just to make sure the wire size is correct.. I guess that's considered a good electrician ?  His last recommendation was to change the DB box from plastic to metal type (wouldn't that be dangerous ?)  and to split the 3P RCCB from 0.1mA into 2 (0.03mA and 0.1mA)..  Will wait for budget then 

All good for now.