1)i think that line to line faults happen in cables.by 
noting the variation in current reading we can locate the 
faults.



2) to save insulators and also to make insulators effective 
between line and ground.

to save cost ,as providing earthing(coal & salt) to 
particular tower for huge current is costly.
also huge current (in case of short circuit)can charged the 
surrounding area.
how much area it can protect ? elabrote
3) refer some book 

4) 8-10%

The most frequent faults are short ckt faults and earth 
leakage faults and insulation breakdown.. Due to these, 
some part of the cable( specifically, underground) get 
heated up and burst.
Locating such faults, some wheastons bridge system can be 
used.
2. the earth wire above the conductor can protect the live 
conductor from lightning surges.up to 30 deg.down max it 
can protect from horizontal level. In distribution system 
normaly does not require bcz the height of such post may be 
as small as 11 mtr, but that of 33kv or 220kv may be as 
high as 28 or 35 mtr.
3.transmission losses are copper heat loss and corona loss 
and insulation loss.( refr Power system by UPPAL)
4.6-12%