The amount of disability that results from avascular necrosis depends on what part of the bone is affected, how large an area is involved, and how effectively the bone rebuilds itself. The process of bone rebuilding takes place after an injury as well as during normal growth.  Normally, bone continuously breaks down and rebuilds—old bone is resorbed and replaced with new bone. The process keeps the skeleton strong and helps it to maintain a balance of minerals.  In the course of avascular necrosis, however, the healing process is usually ineffective and the bone tissues break down faster than the body can repair them. If left untreated, the disease progresses, the bone collapses,  and the joint surface breaks down, leading to pain and arthritis. 
The radiograph demonstrates AVN of the humeral head and early collapse of the articular surface. Patients with radiographic evidence of proximal humerus AVN should also have hip radiographs performed as part of their evaluation.
Cruess reviews 95 patients with steroid-induced AVN of the humeral head reporting success with both conservative and arthroplasty treatment.
L'insalata et al reviews 65 shoulders with AVN of the humeral head reporting mixed results with 35 shoulders requiring arthroplasty after failure of conservative therapies. Surgical drilling and decompression did not alter the progression of disease.
Answers 1, 2, 3, and 5 describe rheumatoid arthritis, Reiter's Syndrome, gout, and septic arthritis respectively.