Rodge, in addition to John B's reply I'll point out in answer to 2)that the sub crossover would be set to the maximum to get it out of the way of the crossover that the receiver was doing except if the sub had a separate input or switch which completely bypassed its internal crossover, making the setting irrelevant.
When the receiver crossover is set to 80Hz, both the LFE(if any)and bass redirected from the speakers set "small" is sharply rolled off above 80Hz. Although the special effects in LFE can theoretically extend to 120Hz, in practice essentially nothing is present above 80Hz, so that crossover is fine. Note that the low bass is actually extracted from the CDs, DVDs or other program material, not the speakers themselves, so the bass is sent to the sub regardless of the low bass capabilities of the speakers involved.
