2. Why do airlines restrict ab-initio candidates to citizens of their own countries?
In a lot of countries you need to undergo strict background screening in order to become an airline pilot. For example, in the U.S. you have to pass a TSA background check. In certain European countries, that check is even more thorough and someone similar to getting a security clearance.
Especially in those cases, it simply saves a lot of administrative overhead (not to mention any visa issues), to hire citizens or legal permanent residents.