I'll preface this by saying that metabolism is an extremely complex topic based on a large number of factors. As a former biologist and ultra-runner I still have only a surface deep grasp on the topic.
To answer your first question...A small amount (about 20%) of your body's glycogen is stored in your liver while a majority (about 80%) of your body's glycogen stores are inter-muscular. The amount of glycogen stored in your liver is highly variable throughout the day depending on activity levels, when and what you last ate, and time of day. If you wake up and go for a run without eating it is safe to assume that your liver glycogen stores are very depleted. However, inter-muscular glycogen stores are far less variable and far more plentiful than liver glycogen stores and will be your body's primary source of fuel for those early morning runs. On inter-muscular glycogen alone you can sustain hours (2+) of intense activity such as running before they are completely depleted. To say that glycogen stores are depleted because you haven't eaten in a while is a faulty assumption to begin with.
To offer you a comprehensive summary...our body is never burning only one source of fuel at a time, rather it operates on a continuum that is affected by a variety of factors. There are three major metabolic passageways through which our body supports activity (i.e. produces atp);phosphagen, glycolytic, and oxidative/aerobic. In the first, phosphate is broken down into atp, in the second glucose goes to atp without the presence of oxygen, and in the third glucose goes to atp in the presence of oxygen. During exercise all three systems are in use. However, as intensity decreases and duration increases the percentage of atp produced through aerobic metabolism increases. In addition to glycogen, fatty acids are also metabolized during exercise. During intense exercise (65%+ of VO2 max) a small amount (<50% of total energy metabolism) of free fatty acids are oxidized for energy while during less intense/endurance exercise a large amount (50-60%) of free fatty acids are oxidized for energy. Therefore, if you go for a long run it can be assumed that about half of your energy is coming from free fatty acids while the remainder comes from the metabolism of glycogen.
A higher percentage of fat oxidation at a given VO2 max is highly conducive to performance because it proportionally reduces the amount of glycogen being utilized to sustain activity. Athletes hit the wall because they are nearing the end of their (very finite) glycogen stores. When that happens, their only real option is to slow down in order to decrease the amount of (finite) glycogen and increase the amount of (nearly infinite) free fatty acids being utilized. It is possible to replenish glycogen stores throughout a race. However, at high intensities (marathon) it is impossible to replenish glycogen stores at the same rate they are being metabolized. It is possible through training and diet to increase the percentage of free fatty acid oxidized at a given VO2 max. This will have the effect of making your glycogen stores last longer. For example, a highly trained marathoner on a higher fat diet will burn free fatty acid for about 45% of his energy at 70% of his VO2 max while a fatty couch potato on a high sugar diet will burn fatty acid for only 20% of his energy at 70% of his VO2 max.
Muscle wasting/muscle metabolism is a negligible factor in exercise with the exception of extreme endurance efforts (ultra-endurance events). I believe that an endocrine response to training can explain the different body types/musculature in endurance athletes and power athletes. For example, a 100m runner trains with short, intense intervals involving fast twitch muscles at near maximal leading while maintaining an intensity near VO2 max. A large amount of HGH, Testosterone, and other anebolic hormones are produced as a result. A similar response is absent/muted while training at sub-maximal intensities (i.e. a long marathon paced run).
If you have any questions please comment and I will do my best to answer.
TL;DR: 1) You are not out of glycogen if you don't eat for a while. You still have plenty in your muscles. 2) Fatty acid metabolism as a percentage of total metabolism is directly proportional to duration of exercise and inversely proportional to intensity of exercise 3)Your body can metabolize up to 60% fatty acids 3) As a competitive athlete, a higher percentage of fatty acid metabolism at a given VO2 max is conducive to greater performance because Fatty acid = almost infinite/ glycogen = finite 4) Muscle wasting not significant to metabolism