1. I think that was done to show he has wealth and to make him stand out.

2. This was a test Vito was conducting. He did it to show Fanucci he's not just another person Fanucci can harass. Since Vito convinced Fanucci to take less money, this sealed it for Vito that Fanucci wasn't such a big shot. Also, there is a deleted scene where Fanucci get's his throat slit by some kids, this also helped Vito realize Fanucci wasn't truly backed up by Maranzella, the Black Hand.

-In my HOME!!! In my BEDROOM WHERE MY WIFE SLEEPS!! Where my children come and play with their toys. In my home.

-My father taught me many things here -- he taught me in this room. He taught me -- keep your friends close, but your enemies closer.