Answer to Question 1
If the product is under-kneaded, the bread will be dense and not rise properly because the gluten is not fully developed. If the dough is over-kneaded, the bread will have less volume and a more coarse texture because the gluten over formed and stretched, causing the gluten to tear.
Answer to Question 2
Milk is scalded to kill harmful bacteria, encourage the growth of the yeast, and to help other ingredients dissolve better. Yeast should not be added directly to the scalding milk or it will destroy the yeast; yeast cannot tolerate temperatures > 140F.