I think it just comes down to "Don't believe everything you read" (especially on the Internet -- ahem).
In my mind, deifying Morihei Ueshiba sensei in any way is kind of sad. It places him above and beyond our reach and makes it otherwise impossible for any of us to be able to reach his abilities.
Was he talented? I think so. Was he insane? Sometimes, I think so. But, there's always that fine line between genius and insanity.
You may want to read the interview with Stan Pranin
that I did over the summer. He talks about his feelings on the tall tales, and I'd have to say that his knowledge about aikido history is perhaps unsurpassed.
PS: As to question number three, I'll be posting a new article that a friend of mine wrote on just that subject soon, maybe this weekend.