They still work when blunted which is most of the time. But ideally they are sharp and slicing pure grass, grass tolerates slicing better than ripping. It's like a sword, ideally it is razor sharp, doesn't chip when blunted, and still works as a decent club even when blunted because it will be the second it hits something hard.

I have a battery electric lawnmower. I found I got noticably better battery life after sharpening the blade to a near razor edge. Yes the edge is more fragile but it cuts the grass with much less resistance.

For regular mowing sure. For reel mowing (e.g. golf) you will want to sharpen them.

That I did not know. I still wouldn't stick a finger near one of course.