Hello, Nilesh,

The look of Noctilucent clouds are almost fully understood, and are due to scattering of sunlight by air molecules and , the Noctilucent  cloud itself .

The noctilucent clouds are roughly 60 nm in size, and mostly made of water ice, and exist at altitudes above ~70 Km, where temperatures are very low ( -140 C).

The clouds are formed by nucleation of water vapour, started either directly ( homogeneous) or facilitated by meteoric smoke particles (heterogeneous) or cosmic rays, ionised species.

The details of which of the above process are important, and to what degree are are not fully understood, and is a ongoing research topic.

Here is a good review paper, you may find helpful.

http://www.sciencedirect.com/science/article/pii/S1364682605003007

Article Modeling the microphysics of mesospheric ice particles: Asse...

Noctilucent clouds occur in the mesosphere, well above the stratosphere, at typically 70 - 90 km, around mid-summer where the temperatures there are coldest. As one ascends from the surface, the solid earth casts less and less of a shadow, and the length of the darkness (night) decreases with altitude. Solar photons scatter and are refracted to angles well past 90 degrees, maybe as much as 135. They can and do illuminate the clouds, which are most likely water condensed on to meteoritic particles which result from the ablation of incoming meteors as they burn up, followed by recondensation into particles sized in the 10-20 nm range. The chemical material so available is therefore very diverse.

The "cold trap" allows through about 3.7 ppmv of water near the tropical tropopause at about 17 km. It also admits about 1.8 ppmv of methane, CH4, which photochemically oxidizes in the stratosphere and mesosphere to yield up to another 3.6 ppmv of water, plus a CO2. So there is about 7 - 7.5 ppmv of water at noctilucent cloud altitudes, plenty for cloud formation at temperatures around 160 K.

Very little, the wavelength threshold is about 185 nm above which water doesn't photodissociate. See section 9.4, page 665 of Wayne, Chemistry of Atmospheres, 3rd edition, OUP, 2000 for a more detailed discussion.

It's maintained at a fluctuating steady state by the supply upwards supply at low latitudes and the downward flux into the winter polar vortex. Most of the mesosphere sinks downward into the stratosphere during winter, at least once and probably more. See Geophys Res Lett, 20, 719-722 [1993]. There is also evidence for mesospheric tracers in the stratosphere from the 1997 POLARIS mission, with James Elkins as the principal author.

The water goes through photochemistry involving OH and HO2, that results in the reformation of water molecules; see the reference to Wayne's book earlier. The deuterium data in the stratosphere basically show that H-D exchange at and above the tropopause is promiscuous and complicated - the simple interpretations expected from arguments based on the slower evaporation of heavier water molecules during convection through the cold trap didn't work well.

Noctilucent clouds are seen from the ground during the transition from Civil Twilight (when the is 6 deg below the horizon) to Astronomical Twilight (when the sun is 18 deg below the horizon) so the the lower atmosphere is in the earth's shadow, reducing the the scattered sunlight, but the upper atmosphere(80 to 85 km where the clouds form) is still in direct sunlight.

   They also can be seen during the day from satellite instrument (e.g. Deland et al. JGR, 108, doi:10.1029/2002JD002398).

 While yes little of the tropospheric water vapor reaches the stratosphere, methane (CH4) does, where it becomes oxidized into water vapor (see Wronty et al., JGR, 115, doi:10.1029/2009JD012135)