I've been using the Raspberry Pi for years since the orignal has been released. Generally, it's a excellent HTPC but you do need to be aware of somethings. It largely depends on what operating system you use. For a HTPC, you will want to use OSMC or OpenELEC which both run Kodi out of the box and are excellent with a buttery smooth 60FPS on the menus. If you want a more desktop like environment, then something like Raspbian will be best.
1) It can easily handle 1080p video. The original Pi was able to and the newer 2/3 will handle it without breaking a sweat. On my Pi 2, both CPU and GPU usage are surprisingly low when playing a full 1080p movie.
2) It can play music.
3) Netflix is a bit of a tricky one. I have never used the service but as far as I'm aware it is not capable of using Netflix, though don't quote me on that. There may or may not be a plugin to use it, though it's not official.
4) The newest Raspberry Pi 3 has WiFi/Bluetooth built in. The older ones can connect to WiFi via a USB adapter.
5) It can play music.
6) No support for Firefox unless you choose the Ubuntu Mate OS (which is bulky and at times slow). The official distribution, Raspbian, has a browser which is fairly light weight though at times slow and is not as capable as Firefox.
7) It largely depends on what wireless mouse you use. The majority of them should work and I have used a few with no issues.
Having used both a PC and a Raspberry Pi as a HTPC, I personally prefer the Raspberry given it's small size, power consumption and silent operation although all I use it for is to stream media from my desktop to the raspberry on the TV.
If you already have a capable HTPC PC and are able to fit it somewhere, it's probably not worth buying a Raspberry.