For part two, rather than:
Who pays for the blogging and curation rewards?
I would like to read about the "Why". It appears that this post was saying that the people who pay the rewards are the people holding the various Steem tokens; they pay via depreciation of their holdings.
What I don't understand is why they would do that. What's in it for them? I worry that the reason people are "powering up" is that they are thinking of it as an investment, whereas in reality the rewards don't even keep up with inflation if SP:non-SP is 95:5 (as you say it is).
Not quite... if you read my second link above, i do a pretty good job of explaining why. Basically, though voting for someone and giving them vests does decrease your percentage share of the system, it also increases the steem value of your holdings.
At the end of the day, what the vesting fund is is a way to mediate the exchange of voting power for steem. You give up some of your (relative) voting power and in return your steem value increases.
Now i suppose you could argue that the best startegy would be only to vote for yourself and award yourself vests and steem. But that only works in system. Youd be hurting the $ value of your holdings