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There's a range of bone and height that each pair can throw, but it's not a huge range. So if you breed two tall cobs you might get a draft, but you're not going to get a riding horse.
And I don't think so, no

There's some variation. If you breed two that are on the tall side for their type, the resulting foal may edge up into the draft scale.

Breed has absolutely no influence on showing ability. The old size/discipline/etc classes were all combined a long time ago. Now it's mostly cosmetic, though there are a couple of tack packs that only show up on one bone type.

... There are no horses in the game, living or deceased, taller than 18 hands

Thanks Everyone. Yes, I am assuming Painted Desert meant 15hh.

Ahaha that makes so much more sense. I was deeply confused =))