For now I will answer the first question only (in extension to Xero's response).
[This is how I always explain it to my pupils]
In hardware, there are a great many differences between two seemingly identical pieces of equipment.
You might be holding them in your hand and they look the same. Feel the same. Smell the same.
To a computer, however, it looks a lot different.
The two devices might be identical, but for all the computer "sees" - The one in your left hand might be a CD player, and the one in your right hand might be a cassette recorder.
Computers need to know how to "talk". Not just to each other. But also to their own parts.
These differences that I mentioned in two similar devices makes it impossible for the computer to simply "know" how to talk to all of it's parts.
That is where software comes in. Software allows us to "talk" to our computer, and for it to "talk" back at us.
But software goes even further. Software gives all of the separate pieces in our computers, the ability to talk to each other.
The software acts as a translator.
Translating between human, component, and all other needed languages all at once.
But even then - some devices "talk" in strange and advanced languages. Not all Operating Systems (like Windows) has all the languages right off the bat. It would be an impossible task for Microsoft (Windows' creators) to manage all these "languages".
So - if your device uses some sort of "advanced language" to make it better, faster, greater, and so forth - it needs to have its own driver.
A driver is simply - a manual.
A manual for the Operating System. To show it (and thus by extension, you and the rest of your PC) HOW TO TALK TO THIS DEVICE PROPERLY
This is the very key of what a driver is, in terms of computing. It is a manual that describes to the system how it should properly be used and communicated with.
Keeping these driver packages up to date helps sort out previous problems, improve performance, and sometimes even add capabilities that were not there before.
I hope this clarifies to you - in a practical and understandable way - what drivers are and why they're important.