The damage of hydro is fairly localized afaik, both spatially and temporally. Fossil fuels cause damage globally (in addition to the local damage of oil fields/coal mines, and the power plants), and the damage is much more long lasting. Also the damage of hydro does not accumulate over time afaik.
Norwegian hydroelectric plants usually don't destroy a ecosystem, just some nice looking waterfall. They have so long and steep falls that ecosystem would be naturally separated by it anyway.
That's not the only damage hydroelectric does. The damns normalize naturally occurring floods with a view to maximizing electricity production, and material that would have been carried to sea gets trapped behind the dam.
In a traditional hydroelectric generator, yes. Norway has the advantage of numerous, steep cliffs and waterfalls. It is my understanding that the Norwegian HEG's are placed in the middle of the waterfalls, so that no dam is necessary...
That's hardly ever the case, and would be quite inefficient unless the waterfall provides the same amount of water all year.
Most hydroelectric power in Norway are generated with the help of a reservoir, usually a natural lake that's been regulated with the help of a relatively small dam, but there are some wholly artificial ones as well, the biggest one being 84 square km.
That said, yes - the environmental impact is small. It also helps that the Norwegian population is very small.