1. Do Mind-flayers exist in Wulfgard, or would that just be an Octopus Beast-Man?
2. How exactly do Demon-Summoning Circles work?
3. Is it possible to create Portals between different dimensions? Say, for instance, would it be possible to create a gateway between the main world of Wulfgard into the Underworld? Or would that be an impossible feat of magic?
1) Nope, they don't exist. In fact, we have not delved into psionics (psychic powers/magic) at all in Wulfgard, and may never do so. Spirit magic is usually used for mind tricks instead, like delving into a person's thoughts and dreams.
But yes, the Octopians are probably the closest to a humanoid Cthulhu looking race... that we know about.
2) A mage carefully draws a circle (using runes, salt, candles, or some other precise combination of artifacts and enchantments) according to the prescribed method. The purpose of this circle is to contain whatever otherworldly power the mage is about to summon. So long as there are no flaws in the circle, the outsider (demon, elemental, etc.) cannot cross it to attack the summoner or escape.
Note that a summoning circle is usually NOT itself a portal - it's more like a cage, to trap whatever the mage summons.
3) It's possible but extremely difficult, and portals between realms are frequently unstable and deteriorate quickly.
Creating a portal usually involves the mage traveling to both the entry and exit points and carving the necessary enchanted runes, etc. For example, Imperial magi once created a portal inside a triumphal arch in the Imperial city and then linked it to an arch on the Northern border, to transport armies. Results were mixed (one army simply disappeared to gods know where), so the portal was disabled, especially after the death of the Mage-Emperor and outlawing of magic. The point is, they had to travel to both ends of the portal before activating it.
Opening a portal without knowing its exact exit point is risky, especially when that exit point is in another realm of existence. It probably would not stay open for long, and there's no telling what could come out of there before it closed.