Shell - 2013-12-14
  1. This problem is new for me.
  2. You certainly would. 7-Zip stores the header in the end of the archive and writes it in the last turn, so an incomplete archive would be unreadable unless you manually reconstruct the header. This is also true for multivolume sets, because (if I am not mistaking) the header is written only once - in the last volume.
  3. Everything seems OK. -t7z and -mx5 are the defaults, so you may omit them.
  4. It certainly has: it cannot use more than 2 GiB of memory (4 GiB since version 9.21). As long as your dictionary does not exceed 96 MiB, you will hardly hit that limit.

Concerning your problematic archive:
1) what error do you get?
2) was the archive ever readable?
3) try a different version of 7-Zip (e.g. 9.22 standalone) and/or abandon encryption - does the error appear then?