Well of course the Thalmor would need to weaken the Empire, after all the Empire is still a super power but the Empire is weak enough especialy since they're throwing legions upon legions of soldiers at skyrim and bolstering other provinces they're basicly sealing their own fate.
Maybe. I hope that is answered in a DLC or in TES:VI.
I believe the Thalmor are overrated. They took on an Empire that had been crumbling for over 100 years, lost 3 provinces to the Talmor and 1 that simply secceded. The Empire was unprepared for war and was, as I have understood it, at an all-time low in military power, but still they where fought to a standstill.
An Empire ready for war, looking at history, will almost be garantied victory, not to mention that elves do not reproduce nearly as fast as humans.