You get 20 votes a day at max voting power. After that it goes down (the value of your vote goes down). So, yes, you do have $0.01 less voting power when you vote for someone with a $0.01 vote.

You can vote for yourself and you'll see people do it all the time, but it's probably usually better to vote for others so they will want to follow you, etc.

Are the interactions genuine? Not all of them. Many people vote on posts simply because they know the post will do well and they want to get the curation rewards, but remember, the people getting those votes put a lot of money into Steem, and in order to motivate people to out money into Steem, they need to get some of their investment back. If you put in $50K how long are you going to keep it in Steem if you're not seeing a return?

So it's not always about the best content, BUT as there are more people with powerful accounts, so to are there more options in terms of content, and given a choice between two posts from two whales, people will go for the better post. So, you don't perfectly get the best content at the top all the time, but you do get a lot of good content at the top most of the time.

I think learning more about voting bots and follow trails will help you to see this is true.