Okay that makes sense, so basically take market cap with a grain of salt, eh?

Considering how its worse distributed than Bitcoin, yep

http://www.litecoinrichlist.com/

Wow, I never knew the top 3 addresses hold 25% of the LTC mined so far.

And this has nothing to do with any exchanges holding reserves. I promise.

It actually doesnt. Litecoin was heavily, heavily instamined in the beginning, and those instaminers didnt sell their coins.