1) yes, everything is affected, but everything else is being migrated to PQC as we speak

2) "256-bit encryption" has different meanings in different contexts. "256-bit security" generally refers to cryptosystem for which an attack takes roughly 2^256 operations. this is true for AES-256 (symmetric encryption) assuming classical adversaries. this is not true for elliptic curve-based algorithms even though the standard curves are "256-bit curves", but that refers to the size of the group and consequently to the size of the private key. the best general attacks use Pollard's rho algorithm which takes roughly 2^128 operations, i.e., 256-bit curves have 128-bit security.

in the context of quantum attackers, AES-256 is still fine although theoretically QCs halve the security; however its not that big of a deal in practice and ultimately AES-128 is still fine, because doing 2^64 "quantum operations" is presumed to be difficult to do in practice due to parallelization issues etc.

the elliptic curve signatures (used in Bitcoin) are attacked using Shor's algorithm where the big deal is that it is asymptotically polynomial (about O(n^3)) meaning that factoring a 256-bit number is only 256^3/4^3 = 262144x more difficult compared to factoring 15. this is a big difference from "standard" exponential complexity where the difficulty increases exponentially by factors of 2^n. (+ lets ignore that elliptic curve signatures dont rely on factoring but the problem is essentially the same because Shor does both because those are hidden subgroup problems)

the analysis is more complex but most of it is essentially in that paper and explains it nicely.