An inspector found carbon monoxide backdrafting from the water heater
in my house. The inspector said may be the ventilation (the flue or
chimney line) needed to be clean. So I hired a chimney service company
to take a look. They say, the reason for backdrafting is not because
of blockage but instead the chimney line is not big enough. Currently
the chimney line is 5" in diameter and they suggested 6" or 7" and the
cost is $75 per ft to replace the line all the way to the roof. My
questions are these:

1. I am surprise that is not big enough since the house is only 6 year
old. At least it will not pass the county code then isn't it ?
2. The water heater flue and the furnace flue share the same chimney
line. Only the flue that connected to the water heater has some
corrosion/residue on its joint. Is this cause by water condensation or
leaking carbon monoxide ?
3. Can my water heater produce more carbon monoxide now than 5 year ago
?
4. Is there any other possibilities on how to fix this ?

Thanks.