Cash it is most liquid thing. Cash have accepted everywhere, but it depend of the currency of cash - Usd Dollar of Euro there are most liquied, but some exotic currencies can be accepted only inside home countries.
Yes cash is a physical thing. We need to accept the fact that bitcoin is not as easy to get or withdraw. We cannot see it instantly. But we more like the bitcoin over it. Because of its price and because we can earn it without knowing of the government. But both sides are good ano problem with that.
Because people use bitcoin not for their currency. Yeah of course with certain reasons such as lack of accepted. They use bitcoin just for their investment and profits. Other than that of course they will use cash or fiat for all activities such as spending, saving, etc.
Pretty much it has the potential to be a real currency but in its current form it is nothing more than an investment tool like any other. I would say 99% or more of people only own bitcoin for its speculative value.