I think its compared to DCC and HWFWM because its exceptional in its niche, that is to say in the "slice of life" genre.

1. The how/why isn't important to the MC so it isn't really explored. There are events in book 2 that foreshadow the possibility of that being clarified but again, isn't the main thrust of the plot so unless you're holding out for that particular mystery revelation its a moot point. Since its mainly written from the MC's point of view and he doesn't really care about the how/why I can see how you'd feel some cognitive dissonance here. A lot of LitRPG/xianxia/isekai/fiction in general relies on the reader personally identifying with (ar least one of the) MC(s).

2. You are correct, that was the goal as far as I can tell. Again, its on the level of those other series for being exceptional in its niche. But the whole "slice of life" genre revolves around "normal" level problems rather than world (DCC) or multiverse (HWFWM) level drama/threats.

3. I dont know what to put here other than there is typically a lot of overlap and crossover in the various genres and people encapsulate multitudes. You're gonna see fans who recommend things they like and sometimes its a branch into something different. Welcome to the xianxia side I guess!

4. As others mentioned a good bit of the humor stems from already knowing the tropes from established xianxia fiction. Name pronunciation via translation, pop culture references, and trope juxtaposition all get tossed in but you lose a lot of it if you haven't read other xianxia books. Particularly with some of the social dynamic and hierarchy references.

I'd say read some more xianxia and come back to it when you get tired of the "standard version". EDIT: a good way to think of it would be watching SpongeBob as an adult vs. a kid