As the aperture gets smaller, a higher percentage of light passes through the center of the lens, making it easier for lens designers to correct for optical aberrations. Those rays tend to bend as they pass the diaphragm, resulting in 'diffraction', a lens aberration that gets worse as the aperture gets smaller. Most good modern lenses perform quite adequately at maximum aperture, the subtle distinctions are most visible when shooting slide film. You only need flash at night or in darkness. So many cameras now have built-in flashes that are great for parties and pictures at night.
More expensive cameras equal better pictures.
Only up to a point. Camera bodies in particular have little to do with the technical or aesthetic value of the resulting photographs. Lenses have far more impact on quality. In fact, camera bodies are really only light-proof boxes for holding film at one end and a lens at the other with a shutter in between. Beyond that, the bells and whistles are mostly there to make photography easier, not better, with automatic exposure, autofocus, and a seemingly endless list of other auto's.