They are totally different, SW is a redesign of bitcoin, while BIP 65 is a planned patch toward lightning network which is easy to understand since it is very similar to a clearing based solution. Lightning network make things more simple (combining thousands of transactions into one) while SW make things more complex (split one transaction into two chains)
No, it is not. Even Pieter said that they would redesign it if it was possible, but it is not.
Oh ok. Now I get it. So they are going to take away the signatures, which in turn will lower the amount taken in a block, and then they are going to make the block-size bigger. That makes a lot sense. What are the downsides of doing this?
Aside from added complexity, there are no downsides (yet).
removing the cryptography in cryptocurrency would seem a downside to me.