3) What is the reasoning for doing hyphenation only after threshold=1 fails. Naive common sense tells me that if the user specify hyphenation we should do hyphenation before finding line breaks.
The purpose of professional typography and layout is to assist the reader: provide an easy reading with minimal distractions. Typographic concepts reflect this. Justified text makes it easier to identify paragraphs. Unfortunately, long words may cause word spaces to be stretched into large white blobs which disrupt reading. Hyphenation is essential to cut down on space allocated for text justification, especially for languages which can form arbitrary long compound words. Hyphenation has of course it's own drawback: words are mostly identified by the letters at the beginning and the end, and hyphenation disrupts this. Several lines ending in hyphenated words may also cause the reader to pick up the wrong continuation line (that's the reason for having the hyphenation-ladder-count property). This tradeoff between using hyphenation in order to avoid visual artefacts and having lots of hyphenated words disrupting the flow has to be balanced.