It's not as weird as you might think: laptops may have touchscreens (which can be multi-touch) on top of the "normal" cursor. IIRC, X.org can't really handle such cases cleanly.
Sometimes that's true, but sometimes (imo the superior approach) the touchscreen is independent from the cursor. I think touchscreen Chromebooks are like that, for example.
It depends on the DE and the application to some extent. The touch events are seperate to mouse events and the mouse cursor moving, but AFAIK usually there is an emulation layer for compatibility with applications that don't support touch events which also moves the cursor, and this behaviour can change depending on the application (either it sets some flag or responds to the touch events in some way). Digitizer pens are the same way.
This is about actually having multiple, independent mouse cursors on the screen at once, with different input devices controlling different cursors.