Of course, you're a fan, like myself. But we don't really represent the masses out there that don't follow forums, but instead watch things like formula 1 on tv etc.
Everything - by participating and being successful in the top motorsports you cement your seriousness as a leading sports/racing car manufacturer. If you don't, it's like saying 'we build great cars, but we dare not race them against other people incase we lose.'
Not 'we', if we're lambo fans, but the wider public would almost certainly prefer Ferrari to Lamborghini, if there was a choice between the two. Ferrari have a HUGE fan base, far far larger than that for any other manufacturer.
While we might prefer a game made to appeal to fewer people, it means that you have a far smaller budget to make games, and ultimately it's lack of (enough) budget that's causing these issues.
Presumably the licensing situation was different back then. There's no proof of that - we've not seen the real version. Not sure on the graphics point - the environments were nice, but those blocky roads were terrible. It was also one of the buggiest car games on release.