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Thanks to your explanation, I understand the reward system better. I need to research and study more to fully understand it. I'm sure there are quite a few people who have mastered it perfectly (it's true that you learn something new every day).
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Yes. Most mechanics on SN are rooted in game theory.
Note that the current state isn't the final state. Things may change, so what I describe above is valid now, but if it is being abused or a new feature is launched, changes can be made to it.
I did find an earlier, much more complete explanation post, but its outdated, so I decided to not link it. It will only confuse people. I'll look into who and how that can be updated.