Hmm, when I launch the game I can mouse over a UI element in Darnified UI (it's a little smiley guy) and it shows me the current version. I would
assume the default UI does this as well, somewhere in the bottom left? Is that how you know you're still on 1.2?
Apologies for the dumb question, just checking.
1) Right click the game, properties, updates tab, view update history. That doesn't really help in this case, though, because Obsidian/Bethesda/whoever does a crappy job of keeping this up to date and relevant. It should look something like this (props to the Star Ruler devs) - http://img339.imageshack.us/i/captureotd.png/
Instead it's filled with commercials and stuff about the Geck... this is on Bethesda, not Valve, in this case Steam is just the delivery guy.
2) Make sure 'keep this game up to date" is selected on that same tab. Try exiting Steam and then reopening it, see if that triggers the update. You could also try the 'verify game cache' option in the local files tab.
3) That's up to Bethesda. Though if a game must have a DRM system, I'd prefer Steam to ANYTHING else, including a printed security key. I feel the positives outweigh the negatives at this point. That's kind of a whole other discussion, though.
-HD