Great info, thanks!
1) No, each transaction is tracked. Assuming the full balance is sent. If X sends to Y an interest is gained for X. If Y tries to send to Z, No interest is gained until 3600 confirmations occur for Y. That could take up to 3 days. If Y then sends to Z after the confirmations Y gains an interest. If Z tries to send that initial balance from X to A. The confirmations is doubled. Now, this is assuming that the full balance is trying to be sent. It will gradually scale to the amount sent from each transaction, a low transaction will require less confirmations to generate an interest.
I look forward to hearing more, but still clear lack understanding of how this system will not be vulnerable to users creating many wallets and transferring money between them in a systematic way. It seems users may just need many wallets and carefully timed automated transfers to abuse the system?