Answer 1

Absolute paths are urls including domain etc., so understandable without context.
Relative paths are urls of items placed relatively to the site. You need the location of the site to understand their location. Their benefit is, that you don't have to adjust them, when you move folders or want to switch from development environment to production.

Site: http://mySite.com/content/myPage.html
Absolute: http://mySite.com/Images/myImage.jpg
Relative: ../Images/myImage.jpg

The image is placed in a folder next to the one of the page. So we go one folder up with "../" and specify the location like in absolute path from that point on.