The Shabbos after I posted this question, I was reading R' Miller's Elul Made Easy and he brought up an interesting point in the Mesilas Yeshurim that I think gives a good insight into the answers.
"We’re going to quote the Mesillas Yesharim at
the end of chapter sixteen. He talks there about the
great men of our past who were chosen by Hakadosh
Baruch Hu. 'Now, it really is worthwhile to study the
following subject,' he says, 'the subject of why
Hakadosh Baruch Hu favored these great
It’s a subject we should investigate. What was
the reason Hakadosh Baruch Hu loved Avraham so
greatly? Why did He love Moshe Rabbeinu so greatly?
We think we know. We know that Avraham had ten
trials, asarah nisyonos, and he passed them all
successfully, and so on. Moshe Rabbeinu was
devoted to his people, and he was a servant of
Hashem with all his heart; an eved ne’eman. So we think we know what made them great. But we’re
making a big error. We don’t understand at all the
greatness of our great men.
Now listen to what the Mesillas Yesharim says.
I’ll read it in English: He says, 'This, in truth, is the
test that the servants of Hashem were tested with,
and this is what set apart each one according to his
degree of greatness. What was the test? It was a test
of who was capable of purifying his heart more — he
was the one who was closer to Hashem and more
beloved to Him.' What does that mean? So, he
explains: 'When they did their ordinary deeds — not
the great deeds that are written about in the Torah,
the heroic deeds of self-sacrifice that we always
speak about — but even their daily deeds, they were
done with the intention of serving Hakadosh Baruch
When Avraham Avinu was busy managing his
sheep and his cattle — that was his business: raising
livestock — he was thinking always about serving
Hakadosh Baruch Hu. When Avraham was in his tent
with Sarah, or Sarah was in the tent with Avraham,
each one was thinking about how to talk in a way
that would serve Hakadosh Baruch Hu. When they
sat down to eat, they ate with the thought, 'How can
I please Hakadosh Baruch Hu with my eating?'
Now, anybody who would have been present
wouldn’t have heard anything. You might have heard
great things, too; no question that whatever words
were exchanged were noble words, but what was
doing in their minds no reporter could have noted.
No tape recorder would have recorded what was
doing. They were just thoughts in their minds. And
the Mesillas Yesharim says that it was these thoughts
that made them great. 'The true nobility of these
great people,' he says, 'was the way they lived in
their inner lives, the way they thought.' They lived
He goes on further, but I'll leave it with that. I know I quoted a lot here but I think every word is very important. I believe that this is what truly separated Avraham and the rest of the Avos from the rest of the world and made them so worthy of Hashem's love.
We also see written in the Kuzari (1:47): "'Four thousand and five hundred. The years detailed in our Torah [by chronicling the generations of man], starting from the time of Adam, Shes, and Enosh, and down to Noach; then to Shem and Ever; then down to Avraham, Yitzchak, and Yaakov, and then down to Moshe. These people were the heart and elite of mankind. Each had many children, [but the Torah does not list all of them by name]. Most of these children were like the peel of a fruit, not attaining their fathers' level, since they did not possess the same divine qualities. The Torah therefore only chronicles those descendants who maintained this divine quality, who were the minority of the individual's progeny. This was true until Yaakov, who fathered twelve tribes. Unlike the previous pattern, now each and every son was worthy of this divine quality. It was in this nation of twelve tribes that divinity settled, and this nation preserved the chronicling of mankind...'"
We see from here that not all of us are so special and worthy of Hashems love to be the chosen people, and that the ones that were worthy were so great that they were deserving of the Torah. When the time came that the twelve tribes were born, Hashem rested the Shechina on the and made a nation out of the twelve tribes in their merit and the merit of their divine forefathers.
I beleive this answers questions 1 and 2, no nation deserved the Torah like the Jewish nation and this is why they were chosen.
Now as for question 3, I have thought about it, and I may be wrong, but here is something that I thought of: There is a well known midrash that we were all by Har Sinai and accepted the Torah, we knew what we were getting into and accepted anyway. As for the non-Jews, I think it may have been something like this, and I hope someone corrects me if I am mistaken: We know that if a non-Jew wants to convert, we highly discourage it, and one of the simple reasons is because it is extremely difficult to follow all of the mitzvos, especially if someone wasn't raised that way. If someone can't follow the mitzvos well and is a Jew, he is punished for that. A non-Jew must only follow the seven Noachide laws. We also know that humans are dumb and make many bad decisions, and I can imagine that Hashem would ask our souls rather than us literally because the soul truly knows what it is accepting upon itself. The soul would also see it as a gamble. It is highly more likely for a goy to keep the Noachide laws than a Jew to keep all the mitzvos (need proof? what percentage of the Jews today in the world are religious, observant Jews?). So, if the soul has a much higher chance of getting into heaven as a goy (or at least avoid a lot of punishment or even kares), it will most of the time choose that. True, the reward for being a god Jew is immensely higher, but it's combined with a greater risk and probability of being a Jew who is not observant.
I know this is a long winded response, but hopefully I have made a good point. I really want people to point out any flaws in my logic and reasoning and if this answer gets at least 5 likes I'll accept it as a valid answer. Thank you for reading!