This is now implemented by inserting a Read more... tag (the button is located below the editor area) a dotted line appears in the edited text showing the split location for the Read more.... A new Plugin takes care of the rest.

It is worth mentioning that this does not have a negative effect on migrated data from older sites. The new implementation is fully backward compatible.

Yes it can! This is a significant security improvement.

The safe mode limits PHP to be able to perfom actions only on files/folders who's owner is the same as PHP is currently using (this is usually 'apache'). As files normally are created either by the Joomla! application or by FTP access, the combination of PHP file actions and the FTP Layer allows Joomla! to operate in PHP Safe Mode.