That district can really only get more Republican as it is overpopulated and the Democratic areas are on its corners.
Erm, no. MN-03 will need to expand, and that could easily take it into Wright County, that's the closest place. Also the parts of Stearns likely to be removed are not Democratic, St. Cloud will likely remain intact barring something crazy. The parts that border MN-04 aren't likely to be removed, rather MN-04 will probably expand into MN-02 just because that's the cleanest way.
It won't be redrawn to be a Democratic district, no. (Although it would actually be very easy to do so if anyone wanted to, just split Saint Paul.) Bachmann's home may very easily be drawn into the Saint Paul based district, and if Dems get their way it's drawn so far out of it that she may have trouble holding it in a primary. (The real target of such a map is Paulson.)
That was quite likely if Minnesota lost a district, but I don't see that happening now. MN-02's population excess is actually almost equal to the deficit of MN-01 and MN-04, so there's an easy drawing. So MN-06 probably ends up losing areas to MN-03 (which will need even more population due to losing some inner areas to MN-05) and MN-07.