"Can Michael make up enough points on Alonso in this race (starting in second as opposed to Alonoso's 10th place) to make the end of the season a nail biting finale?"

Yes he can! Alonso's engine blew up and Michael won, so there are only 2 points in it now with three races left in the season.

"Will Michael retire at the end of the season?"

Yes he will. Which is a shame as he if for me an integral prt of F1.