I found a folder called "backup" that has, for example, "LokirsTomb.bak" and it's the exact same size, in my case 112kb, as the .esp file in my data folder. There are several of these. It looks as if they get created every time you save, much like the saving system ingame where autosaves will eventually replace eachother.

So for example, if the creation kit crashes during a save, corrupting my .esp, I can just go into the backup, grab a .bak, rename it to .esp and it's all good?

Yup.

Yes, but those are only 10 backups stored everytime you save.

I still make a habit of making one additional backup every day before I start working on my WIP.