1) as of beta, processing uses java2d underneath by default, so it's simply a cleaned up implementation of the java2d api. as we get closer to 1.0, P2D will make its return which is faster than java2d. P3D is also faster than java2d, but is lower quality (no line joins, no smoothing). in using processing even as a layer on top java2d, it means that you don't have to write several lines of archaic code and create multiple objects just to draw a colored line with a specific thickness.

2) not really.. i render things for print all the time. i don't think the device coordinates thing would help much at all.

3) this is a useful sketching/prototyping language. i build things like what you describe all the time using processing. i recommend it as a way to get started with building an app, and once you've worked out some of the issues, you can decide whether it's time to move on to c++ or something like that. but it's been a while since i've had to make the jump, since i can get nearly everything i want done from within processing (or by using core.jar as part of another project).