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2) Sounds like a bug report? Try here[en.uesp.net] and see if it's covered; otherwise, somebody here will have some ideas.
3) When your character level increases, you get a Perk point (like a talent point) to spend on one of the skill trees. You also increase your health, stamina, or magicka. Other than that, yes, to get you bigger monsters and better loot (in many places-- other times monsters or loot is fixed). There are some level requirements to certain quests as well.
Your character level is what determines the enemies you fight, as well as what equipment those enemies have and the loot you can find. Some of the quests have a level requirement as well.
Q2: Did you unlock the shout? They should have given you the knowledge without needing to spend a dragon soul.
Q3: Leveling up unlocks quests, better loot, and most importantly perk points.
Preference on which you like more. Though if I were to give a writing award to one of these, it would be Skyrim.
Fo4 plot - Find Son
Skyrim plot - Stop a Demi-God world devouring dragon.
Q2) Shouts need to be learned and equipped before you can use them. All Shouts you currently have are in the Magic menu, under "Shouts". They also have a cool-down; using any Shout means you have to wait 8 seconds before Shouting again, even if you want to use a different Shout.
Q3) Correct. Every time you use a skill, the progress bar for that skill fills up more. When the bar is filled all the way, it contributes to your character progress bar. When THAT bar is filled up all the way, you've hit a new level. That allows you to increase one of your three base stats and gives one one skill point that you can use to gain a perk in any of the skill trees.