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good questions
+20% pack size means you get 20% more mobs per pack. If a pack has 10 mobs, it now has 12 mobs.
More mobs = more chance to get loot. That's indirectly buffing quantities.
More difficult mods have a better waystone drop chance multiplier. So the harder the map, the more waystone you drop in the map.
It's not drop rate, it's increased rarity. Like if an item drop on the ground, it will have some chance to be one rarity higher (like if it's a white, it will be a blue instead etc.).
For orbs it also behaves like generic drop rate, so if an exalted orb has something like 0.001% to drop (totally random number, but not really out of scope either), you get X% more chance to loot one.