That's 4 questions
The more games you got the larger the database files are which means it takes more CPU to deal with it all. If you have a lot of games that means you have a lot of images which can use up more ram and vram which can impact performance on lower end hardware. The 2 are intertwined which can impact performance together.
Library size really hasn't been much of an issue for quite a while since Jason did a bunch of work on the database and caching a while back unless you have a truly massive library and a very low end system. We find now people have more performance issues due to a lot of auto-generated playlists, these put a heavy load on startup due to all the xml processing that is required to parse all of the data.
The refresh images tool does just that, it refreshes the images looking for any changes that may have happened to your images.