It reduces the amount of Nitrogen that is absorbed by your body during a dive. Absorbed Nitrogen is responsible for decompression sickness , DCS, commonly known as ' the bends'. It allows for shorter surface intervals and longer subsequent dives due to the lower residual nitrogen level following a dive. Yes, because Nitrox increases the percentage of Oxygen in your tank, the partial pressure of Oxygen that you breath will increase rapidly with depth. Conservativly speaking a partial pressure of Oxygen in excess of 1.4 can result in Oxygen toxicity.
Oxygen toxicity can cause seizures.
There is a specific MOD for each mixture of Nitrox. As stated above, you have higher partial pressures of Oxygen with Nitrox. Therefore your MOD will be less with Nitrox. Oxygen limits are not new, they have been there all along. Usually with nitrogen, time instead of depth is the limiting factor for a dive.