OK I think I may have figured out #2 as well, and also why removing C3 doesn't seem to make any difference. I had thought that C3 was responsible for powering the LED, but I'm now guessing that C3's only role is as a smoothing capacitor in the rectifier stage; the voltage presented to the LED is actually a heavily rippled DC voltage, and C3 smooths out the ripple. R6 protects the LED because it controls the current flowing through the diode network. Removing C3 just feeds the LED the raw, rippled DC voltage, with current still being determined by R6. Maybe the ripple is just fast enough that I didn't notice it when I took out C3.
Please do correct me if I'm completely wrong though! I promise I didn't set out intending to talk this through with myself in a public forum.
Please do correct me if I'm completely wrong though! I promise I didn't set out intending to talk this through with myself in a public forum.