Answer to Question 1
A matter of opinion, while casting directors end up employing individuals to play certain roles, most people would admit that the more authentic the hire for a role in a production, the more believable the live performance. While some might argue that this violates affirmative action principles, one cannot argue that the same standards for employment in a musical production should be applied in a manufacturing facility, for example. Also, importantly, the concept of BFOQ (Bona Fide Occupational Qualification) carved out an excepting for hiring actors and actresses under federal law.
Answer to Question 2
Equity is a general term in the context of theatre. For example, the Actor's Equity Association (AEA) is the actors' union for stage actors and managers. The contracts involving the former involve the result of union negotiations and the contracts are often referred to simply as an Equity contract (a contract involving members of the AEA, for example). Productions not backed by the AEA are, in fact, known as non-Equity productions.
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