The atmosphere changes through the play, but most of the play it is tense and eventually tragic.
There is more than one theme. The main one is betrayal.
Diction? That's a tough question. Elevated? Poetic? It depends on when you're asking. Verse is used throughout, but not always. Iago is very crude at times. If I had to generalize, I'd say "intensified."
As for characterization…that too is difficult. Do you mean how characters are characterized? Then, broadly, through action, speech with others, and speech alone. "Speech" would include word choice. If you mean what each character is like, I'm going to refer you to the Character Analysis section of the eNote for this play.