Do coaches abilities improve similar to players?

Yes, and they can decrease in the same manner as well. You can visit their personal page to track their career progress.

coaches seem to be either nfl grade (and are all taken) or highschool grade. Where are the ESPN analysts waiting for a call up? The college coaches waiting for a go in the pro's?

May I bump a little and ask do coaches improve consistently overtime or is it like how player potentials are? And would it be better to hire a experienced or young coach?

Coaches will improve or regress pretty consistently in the same way that players do. If you find a young coach with an upward trend then I would try to get him, but unless he gets hired as a head coach somewhere else you can always try to get him in a future season (and likewise if you don't make him your head coach he might get taken by another team)

so you can steal coaches from other teams?

You can if you are giving them a raise and a coaching promotion. From positional coach > coordinator > head coach.

exxxxcelent *monty burns hand motion*

time to check out the possibilities!

Also the only time you can steal a coach is during early free agency.