I've pretty much always started every game at level 1. Not really sure why, but it's what I've always done. In one way, I like this because it allows players to grow into their characters. When just starting out, there's only a few things to keep track of, and the player is well aware that he is no superhero, so he is careful and doesn't usually just charge into a fight (I've definitely had exceptions to this, though).
I'm not sure this is a great idea, especially if the players are all experienced. Allowing them to start at level 3 or even level 5 really wouldn't overbalance anything, and would give them a solid starting point, where they don't have to run in fear if they encounter a small group of orcs.
The big hold-up for this is determining what, if any, magic items the characters possess at the start of the game. The old Companion set had some decent rules for starting at high level, but that's pretty much the only rules version that addressed this, if I recall correctly.
Thoughts on Q2
1 hour ago