Since you seem not to know a lot about what JAVA is, I'll try to just cover the basics. I am too lazy to look up dates but I'm sure that you can if that is important. There have been many types of computers out there. You have the "Windows" computers that are derivatives of the old IBM PC line of computers. There are Apple computers (MAC) that used to be running on Motorola processors that were never compatible with the PC. There are the newer Macs that run on Intel processors. There are LINUX machines and there are various cell phone platforms. There also were/are computers that were UNIX systems (Solaris, HP_UX, etc.). The bottom line is that if you wanted to create an application that ran on "everything", it would have been a lot of work. JAVA is a "virtual machine" concept that, if programs are written to 'run' on this virtual machine, all you had to do was run a standard program through a process in JAVA and the execution would be similar or identical regardless of what hardware and operating system you are running. That is, ideally. Since JAVA relates to the applications that you have on your computer rather than your real hardware and OS, the answer to your questions is more defined by what applications you are actually running.
If you are not running any JAVA applications, then you don't need JAVA on your machine. In the early days of JAVA, the installation of applications automatically installed JAVA at the correct version for the application. If you uninstalled JAVA, the application you downloaded or licensed would stop working. Today, Oracle owns JAVA run-time so it is more of a separate upgrade rather than being controlled by the applications that you run and, yes, you could wind up with multiple versions of JAVA if you run some older software that require it.
So, how do you know if your applications require JAVA? If you had the documentation for all of your software items, the system requirements section might specify JAVA version x.xx.xx.
Too difficult? P-I-T-A? Don't have the information? The only way to tell is to uninstall JAVA and see what happens. Of course, first, I'd download the latest JRE to your HDD just in case stuff stops working. For example, Symantec/Norton products usually use JAVA as a basis. Other products as well. Not every product does; some are based on other development systems such as Microsoft .NET and a few other platforms.
As for using an older version: Many people are still using Windows XP and Oracle has capped versions that will run under XP because, well, they don't want to test under XP. There is usually a warning if you try to install a newer version of JAVA on XP that this may or may not work too well (just so they warn you). We had an application at work that was written a long time ago and they found it only ran on JAVA 1.6. Anything newer was a no-no. So the programmer advised new users of the system that they had to uninstall the latest and go back to the older JAVA. (Eventually, one of our users: the FBI, demanded the application be rewritten, and it was.