The second question about being small in number is flawed, because, we don't believe that everyone should be jews. There are 7 Noahide commandments for the rest of the world, and the 613 for us. Note that the seven basically amount to being an upstanding human being who participates in civilized life. Non-jews who keep the seven are considered by rabbinic judaism to be righteous gentiles and merit the hereafter. So clearly there is not one objectively right way to serve God.
As to the first question, in light of the above, evidently there are different roles in this world. My understanding of the role of Jews stems from Ex 19:6 and Isaiah 42:6. We are meant to be held to a higher standard of devotion to God, so as to set and example for the rest of the world, so that they can keep their seven.
Sometimes living an upstanding, moral life by the 7 is hard. Sometimes doing something wrong may feel right. Sometimes the reason you do something is not because you want to or because its fun and easy, but because it is for the greater good. So you disregard your own thoughts and feelings, and do what needs to be done.
As a holy nation of priests, and a light unto the nations is our role, our way of life takes that discipline to an extreme. We do many things that don't even make a particular amount of moral or rational sense, that put us out and inconvenience us, that draw attention and are strange, solely out of devotion to God; to principle. We do those things so that when people notice those practices, that commitment, and see the community it cultivates, the caliber of people it raises, and the favor it evokes, the can be inspired to maintain their moral code, one which is a purely rational and morally upright one, even when it is hard or their feelings and desires pull them away, and misconstrue basic morality to "not make sense".
So our role as Jews is to be held to an inconceivably high standard, that doesn't make rational sense, so as to help the rest of the world maintain the simple standards that do, even when their thoughts and feelings dissuade them from what is just bottom line the way you should live.
EDIT: It bears mentioning that, since we entered Canaan over 4000 years ago, we have at best tenuously upheld our end of the deal, (see also). Consequently, the curses detailed in the two preceding sources have come upon us, in place of the blessings. So currently our observance is a more introverted exercise, as we are attempting to show that we have changed and that we can 'do it', so that we may witness the messianic era, be restored to our position, and in earnest fulfill our role. see Ray's answer here.
All of that said, by design, the irrational portions of our faith in fact have an ultimately rational function. May we SOON realize that purpose!