Yeah, I've heard other people mentioning the house system- did you like it? There was a lot of stereotyping and villainizing in my time too- people tend to exaggerate the importance of their faction trait while putting down the others, when really, people should probably strive to be selfless, kind, honest, brave, and intelligent if they're going to bother to strive towards being anything.
It depends on the faction, but generally there are always a good number of kids who did. I actually switched, and so it was my job to train all the transfer initiates each year. Dauntless normally has a good number of transfers, but they don't all make it through.