Re: Can more than 6 play with expansions?
Items are anything that has a listed Gold Piece value (including "No Value").
You are correct on the example you provided. Unless you are playing with an older set of Munchkin (printed before the 2010 rule change), Monster Enhancers (even the negative ones like Baby) do not change the level of the monster they are played on. They change its combat strength. Thus, the extra +5 sounds like it would stay in effect as the other monster is now a level 6 monster with a -5 penalty (so a combat strength of +1).
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My unofficial, but comprehensive Flowcharts: Munchkin: A4 Letter; Munchkin Quest: A4 Letter
Rules Checklist for all Munchkin sets: A4 Letter.
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