Answer to Question 1
The core of a Seyfert galaxy is extremely luminous. The luminosity of the core fluctuates quickly and randomly.
Answer to Question 2
Blackbody radiation creates a continuous spectrum of photons at different wavelengths. When these photons pass through a cool gas, some are absorbed as they excite atoms in the gas. An observer on the other side then sees a continuum of photons with gaps at certain wavelengths - an absorption spectrum.