1) prosaic response: Vincent builds advancement in to his games. Dogs in the Vineyard, In a Wicked Age, Storming the Wizards Castle, Even Kill Puppies for Satan, they all include some idea of advancement, change, or improvement.
more meaningful: I think CHANGE is more key than anything else. People are not static, especially not interesting characters. We change over time. As such, having characters change mechanically to show that fictional change works. In some cases, it's accumulative, sometimes it's just drift. Dogs is much more about drift than improvement: In Apocalypse World, it seems to be about broadening abilities rather than anything else.
2) yeah, this really doesn't make a lot of sense. When playtesting I did kind of concern myself about people improving to fast, but that was my hangup that I got over: I'm used to thinking of improvement and experience in terms of the straight up "level up" reward, rather than a way to add depth to a character.
3) Pretty much with Bret. It's a way for other players to help direct how play goes: either to provide impetus for the player to continue playing up how hard he is, or maybe to show how he's weird because it's something I haven't seen before and I'm curious, or whatever. highlighting isn't about rewarding someone for "succeeding." It's about telling them this is something they might enjoy doing more of.