Simplify + improve unicode testing code.

When the file is not found, use (current-load-relative-directory)
instead of having it end up in the working directory.
Simplify decoding code into one `cond'.

(It's likely to get written in some better way, for example, avoid the
extra work for simple strings.)
Get rid of the `#:function' keyword.

These problems are always dealt with via an internal function instead of
making the name argument part of the visible API.
Remove unnecessary line.