Almost all staff on the TW team are volunteers, including bloggers and forum moderators. I believe in-game moderators fall into that as well.
You'd have to ask Morthy for specifics.
Bloggers get pp based on how many blogs they post per month, up to a maximum of 200 pp for four blogs. It isn't 50 per blog though. Each one is worth progressively more, so fewer than four blogs means significantly less pp. (This was true as of several months ago, and they probably haven't changed it since.)
It has been over a month sense the last blog. Why doesn't a moderator open up the application process and see if someone is more willing to blog on a regular basis?
I'm afraid I don't understand the question. A need for this thread? Not particularly, but I'm not going to close it. Of course, it will be unstickied before too much longer. As for the blog, well, there's always going to be a blog. There just sometimes isn't a blogger to update it.
Edit- And it's closed. Prospective blog applicants for this world can feel free to sign up Here