@RaptarX has explained most of the questions already. On the topic of mining difficulty; to my understanding, it is the level of difficulty in finding a block. Miners are required to solve complex computing work, this is the mining difficulty.
That's why it's run on the PoW algorithm; Proof of Work, the computing work verifies the block and also prevents and malicious attempts on the chain. The mining difficulty is adjusted to maintain the number of bitcoins created on average. The difficulty could be increased or decreased. It is done every 2016 blocks
- How is BTC price affecting miners and therefore also mining difficulty and block generation process?
Miners earn a fixed number of bitcoins per block created, regardless of the value of bitcoins at that point. A decrease or increase in price would affect their reward. If the price increases, mining becomes more profitable and attracts more miners and this increases the blocks created, and the mining difficulty is adjusted to balance the rate, so only the miners with the best mining rigs can find blocks. So the cost of mining increases.
Also if the price drops, mining becomes less profitable and miners could drop out reducing the competition and the rate at which blocks are found, the mining difficulty would be reduced, this reduces the cost of mining. So the existing rigs find blocks faster.
In my opinion, the price of Bitcoin and the mining difficulty are interdependent and balance each other.