Depends on what you mean by faster, it would probably be
quicker with a smaller tire but not faster.
Yes, but only at low speeds. Take a look at the
awesome MPP HP/Torque graph to see what i mean, you are essentially stretching the ground speed portion of the X-axis (by increasing the amount of distance traveled per motor RPM) which does mean you spend more time in the "low power" region of the graph, but that's all < 50 MPH. Once you are past the start of the power drop off (around 50 MPH) you start to get some benefits by having more power and torque available than you normally would.