1 - It depends on what your contract states and what you have agreed to.
2 - It depends on what your contract states and what you have agreed to. If you have agreed to work on it until the client says you're done, you've left yourself open to this sort of behaviour. I write my own contracts stipulating what I will do and what the client gets for the money.
3 - You write your contract to stipulate your expectations/conditions. The client agrees to that by signing the contract. For myself, I offer three submission stages per image (sketch, colour rough, final) with one round of revisions per submission stage. Extra rounds of revisions are charged. No stage goes forward until the previous stage is approved. I also do not start work until there is a 50% non-refundable deposit in my bank account. If, at any point, the client asks for anything beyond the scope of the contract, I politely point that out and let them know how much extra it will cost to make that happen. If the client is not paying for revisions, they have no incentive to stop asking for them which leads to endless tweaks and a bad effective daily rate.
Am I right in thinking that you have submitted your milestones on time and that the client hasn't paid you?