I have purchased a theme for my magento stores present on different domains. Please let me know can i use theme with all the other stores or use is limited to use only on one magento store?
that's one you'll have to ask the theme company you bought it from. Some will say "one installation" and others will say "one domain"
As far as website optimization concern. I think you can use same theme on multiple domains as long as your content is unique and user friendly.