I haven't used paypal via phone, but paypay via the web is free for person-to-person transfers as long as you mark the transfer as such. There is only a charge when transferring to a merchant.
Not sure about that. My landlord can't accept rent via PayPal without paying a huge fee, and that's when I've funded my transfer via ACH. He doesn't have a merchant account, just an individual account.
I think it was because of the transaction volume. Once you get past $3,000.00USD it looks like you automatically become a merchant with PayPal, even if you're not.