1) I don't know if it's any faster, but not having to put in the discs is a huge plus in my mind. I'm a guy that might have three different games going at once, so this is a big benefit to me.
2) You will get 8 million opinions and arguments on this. Some people are very sensitive and passionate about game pricing. Personally, I'm a gamer, I really like games, and I buy games. I'll pay $59.99 for a 12-hour game if its good. The Witcher 3 is easily worth 25 bucks (it's a lot longer than 12 hours too.)
All that said, I have noticed console games do not get the deep discounting PC games have gotten over the years. Even five year old games still sell for $19.99 or $29.99 new. This is somewhat offset by "Games with Gold" that gives some decent older games free, and deep discounts on others.
3) Most games are 30-50gb in size, and require a full install. So 1TB is probably 20-25 games or so. I bought an external 3TB hdd for about $100. Any USB 3.0 external drive will work.