How to correctly secure an application that uses i

I am currently developing a puzzle game for Android and I would like to have the following features when completed :

Free to play (ad-supported) so an active internet connection is required (unable to play if unable to display ads)
In-app purchase option to remove ads and connectivity check
In-app purchases for additional content

However I realize that there are many questions that stem from my requirements...

Is it a good idea to have a single version and offering the option to removing ads via an in-app purchase rather than having 2 versions of the game on the Play Store? Maybe it is a better idea to have 2 separate apps but then, how could I share data between the 2? e.g. if a user buys additional content on the free version and then decides to buy the ad-free version, I would like that the content he bought in the free version be also available in his paid version.
What are the best practices to ensure that the game cannot be 'hacked' to get the additional content freely? I understand that new content should not be included with the original app and be downloaded separately once the purchase is made, but what can I do to prevent that a user that has bought some content cannot redistribute it freely? After all, 'downloading additional content' is simply contacting a server to get data and then adding it to the local DB.
The only way I see to implement the 'no ads and offline play' version (without having 2 distincts version on the Play store) is by updating a simple field in the local DB, but this does not seem like a clever solution because then a tech-savvy user could simply switch this bit by himself to unlock the ad-free version, what is the best way to prevent this?

Thanks!

p.s. Well, answers are not pouring...Upvote this question for more visibility if you want it answered!

Well it very unlikely that a normal user can excess /data partition (Application data), but if you can to play safe; you can use SqlCipher (Transparent 256-bit AES encryption of database files).

You can check, it example at:

http://sqlcipher.net/sqlcipher-for-android/

Thanks, Munish