Converting a traditional blocking application to a non-blocking reactive application using WebFlux in Spring Boot comes with several challenges. These challenges include managing backpressure to prevent data overflow, understanding reactive operators to compose and transform data streams effectively, and adapting to the asynchronous nature of reactive programming. It is not necessary or practical to eliminate all database calls and replace them with external REST API calls when transitioning to reactive programming. Ensuring strict blocking behavior contradicts the non-blocking nature of WebFlux. Replacing all reactive components with traditional blocking components would defeat the purpose of adopting reactive programming.

The @RequestHeader annotation is used to bind the value of a method parameter to a named HTTP header in a Spring Boot application. By specifying the header name as a parameter to this annotation, you can access the value of the corresponding HTTP header. The other options are not valid annotations for binding HTTP headers in Spring Boot.

To externalize configuration properties in Spring Boot, the "@ConfigurationProperties" annotation is used on a configuration properties class. This annotation binds properties from the configuration files (such as "application.yml" or ".properties") to fields in the configuration class, allowing easy access to configuration values.

To implement custom validation rules that cannot be expressed with standard JSR-303 annotations, you should create custom validation constraints by extending javax.validation.Constraint and implement the validation logic in the isValid method. Then, apply these custom constraints to your Spring components. This approach aligns with best practices for custom validation in Spring Boot applications.

In a microservices architecture with Spring Cloud, client-side load balancing is achieved by using Netflix Ribbon. Ribbon is a client-side load balancer that helps services locate and balance requests across multiple instances of a service.

In a Spring Boot application, handling different databases and schemas among microservices can be achieved using Spring Boot's multi-datasource support. This allows you to configure multiple datasources and associate them with specific microservices. Creating separate applications for each microservice would lead to unnecessary complexity. Sharing a single database and schema can cause conflicts and scalability issues. Using a NoSQL database is an option but might not always be suitable depending on the application's requirements.

In Spring Boot, the @Bean annotation is used to define a bean that holds business logic. When you use @Bean, you can configure and customize the creation of the bean, making it suitable for holding the application's business logic. The other annotations (@Component and @Service) are used for different purposes like component scanning and service layer, respectively.

In Spring Boot, "Reactor" allows developing reactive applications by providing an alternative to the traditional, servlet-based, blocking architecture. Reactor is a foundational framework for reactive programming in Java and is used extensively in Spring's reactive stack. It provides the building blocks for creating non-blocking, event-driven applications.

The @Repository annotation in Spring Boot is primarily used for database operations and is typically applied to DAO (Data Access Object) classes. It includes functionality related to data access, exception translation, and transactions. On the other hand, @Service is used for defining business logic and typically includes the service layer of an application. @Repository focuses on database-related concerns, while @Service is more about the application's business logic. The other options provide incorrect differentiations.

In Spring Boot, you can prioritize different @ControllerAdvice classes by using the @Order annotation on each class. This allows you to control the order in which these classes are applied when handling exceptions. The other options don't provide a direct way to prioritize @ControllerAdvice classes.