Taipei is "cold" (ha ha ha - I'll explain this in a minute) in December and January. Since Taiwan is a tropical island, "cold" means that the highs might be only 18 or 19 degrees and the lows will be around 13 degrees. Those months are not very rainy by Taiwan standards, so it could be a very good time to go. I'm not sure about this, but I have the impression that it might be windy at this time of year, so you might need a jacket of some kind. You will hear Taiwanese people say in all seriousness that Taipei is cold in the winter, but I've just told you what that really means.
As EU citizens you should be able to stay visa free for up to 30 days. There is no possibility to extend while in Taiwan. I stayed at a pretty expensive hotel in Taipei as a treat to myself, so I'm not a good person for giving you the living costs. Meals are not particularly expensive, depending on where you eat. You could get by for 5-10 Euros for sure at many places or pay more at more expensive restaurants.
I'm a little tired of answering the constant "What can I do in Taipei?" questions we keep getting here. See here for suggestions:
http://wikitravel.org/en/Taipei
If you want to visit a real Taiwanese temple, I highly recommend a visit to the fascinating Longshan temple. Whatever you do, I'm sure you'll have a great time. Taiwanese people are very friendly and it's not difficult to find English speakers there. I haven't been to the other countries you asked about - sorry.