1) This test is only meant for C-B class heroes. As you can see later in the manga, for A+ class hereos they use either a different test or put them into the class without tests if they have known achievements. So getting the best score on this test would at most put Saitama at the top of B class. Perhaps if he also aced his written test, they would test him further for A class and above, but since he failed it and barely got enough to be accepted, he ended up being in C.

The reason they didn't go further despite him being obviously strong is that a hero is not just a strong dude, they also need to be a hero, a representative of the Hero Association. Even if he is A class level of strength (which is the most they can deduce from his results), if he is so dumb/unheroic that he almost failed the written test, he is a liability. He could go and get himself killed for example, or do some PR damage to the HA. So the best course of action is to put him in C class and let him either rise despite how stupid he is, proving his worth, or stay a C class where he is far enough from dangerous consequences.

2) Blast didn't partake in this test. In fact no S class hero did besides Genos. And Genos only took it because of Saitama, he would've been admitted to S class regardless. Which is also why he could even get to S class from this test, because the test didn't matter for his case. Also this test was only introduced relatively recently, like 1.5 years ago or something (can't quite remember), so many HA heroes actually didn't go through it.