Interesting situation, iPhone 5 stolen.

Problem is I had just had this iPhone switched out with an old one because the screen on the old phone had shattered. This phone was on the restore screen, but I didnt have wifi. The phone was never restored. My questions are;
1.What could someone who came upon my phone do from this screen?
2.Could they wipe it and use it as their own?
3.Could they restore from their own apple ID with my sims card in there?
4.Would they have to restore my iCloud to move forward, meaning I could catch them on Find my iPhone?
Something I have conflicting opinions on, I called a couple of apple stores and spoke to geniuses, one said the serial number could only help if the theif tried to pawn it, one said I could call Verizon and give them the serial number, report it missing, and it would be rendered useless to the thief. Anyone know the truth?

1) Restore it
2) Yes
3) Yes.  They would likely remove your SIM and replace with their own.
4) No.  They can restore and use as their own.
You would have to Ask Verizon if they have  ablacklist ofr stolen phones.  They cannot render it useless, but they could put it on a list so that the thief could not sign up for Verizon wireless service using the stolen iphone.

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