I'd first try turning off the bt connection on your phone and then turning it on again. I've never had much trouble with bridge performance except when in poor cell coverage area. The bt off and then on technique has generally worked to reestablish functionality for me.
Have you downloaded any new software since it started going buggy? I have tried ( and then had to uninstall) 2 News apps because after installation, the Internet and Bluetooth both went south.
*Does anyone know what happens to purchased apps? (Do I get to reinstall for free?)
Yes you do get to install them back. For apps that were free when you got them and now are paid apps, for those unfortunately you will have to pay the current price.