Ok.

Played my first game and still a little confused about how abilities work on character cards and I have a few other questions as follows:

1) Since there are only 3 tokens for drained domains does that mean the maximum amount of Domains that be drained per turn is 3?

2) Can an ability on a character card be used at any time an action can be played if it applies? Even if the character is exhausted?

For example in the core set the Clover Club Torch Singer

Her action is to give someone -2 skill for a phase. Do I just trigger that? and Say I am doing it? Or do I have to exhaust her to use that action?

Or how about PATSY. Sacrifice him to drain exactly two tokens from a story. I dont have to pay for that I just trigger it? I guess I am having a hard time understanding when you can trigger an action on a character and if you have to pay or exhaust or how its used

3) When it says to "pay 1" to do something does that drain a whole domain? Also does the color matter?

4) When it says I can sacrifice someone as an ability can I do that whenever I want? I just kill them off and apply the effect?

1) Since there are only 3 tokens for drained domains does that mean the maximum amount of Domains that be drained per turn is 3?

No - if you get additional domains (Eldritch Nexus, for example) you are free to drain them to pay for things in addition to your starting three. It's just that in most games you will usually have only 3, so they only put 3 markers in the core set.

2) Can an ability on a character card be used at any time an action can be played if it applies? Even if the character is exhausted?

For example in the core set the Clover Club Torch Singer

Her action is to give someone -2 skill for a phase. Do I just trigger that? and Say I am doing it? Or do I have to exhaust her to use that action?

Or how about PATSY. Sacrifice him to drain exactly two tokens from a story. I dont have to pay for that I just trigger it? I guess I am having a hard time understanding when you can trigger an action on a character and if you have to pay or exhaust or how its used

You can use the printed Action any time you can pay the cost. Clover Club Torch Singer tells you to "Pay 1 to..." It doesn't matter if she is exhausted, just if you can pay 1. You could do that multiple times in the same turn if you could afford to pay it.

3) When it says to "pay 1" to do something does that drain a whole domain? Also does the color matter?

To generate payment points, you must drain a domain. And you don't get change! So if you drain a domain with 3 resources to satisfy a "Pay 1" requirement, you don't have 2 left over for something else. The faction does not matter on a "Pay x" requirement.

4) When it says I can sacrifice someone as an ability can I do that whenever I want? I just kill them off and apply the effect?

It depends - if it is an Action, then it has to happen when you are allowed to take an Action (see Page 13 of Rules for details on when you can do Actions). But as long as you are allowed to take the action (or whatever the mechanism is) you can do that. You can only sacrifice characters you control by the way, unless the card tells you otherwise.

Ok one last question. Would the Club Singer have to be ON the table to use that action, or can I play actions from my hand?

She has to be on the table, or 'in play' as the rules say. However some cards have actions that can be triggered from your hand. In these case it will say so in the action text.