A masters theses is basically just a project and a report. Usually little to no original research. It's more about practicing writing reports than anything else.
Depends. A PhD thesis with negative results (one that does not disprove the null hypothesis) is still original research and still counts for the poor chap that made it for the degree.
You cannot know a priori that you will have positive results that will advance the field.
Linux kernel is easily more than just a development project.