Answer to #1
In the Player's Guide - Page 15:
All powers with the Teleportation keyword deal 1 point of fire damage to the creature teleported for each square teleported, and the creature arrives ablaze. Arcane scholars suggest various methods for avoiding this damage, including transforming into a creature immune to fire or using a spell to grant fire resistance.
After you teleport, and until the start of your next turn, your melee weapon gains a +5 fire damage bonus.
In combat, we wanted to make the teleport effect have both a damage effect a bonus effect to offset the penalty. Teleportation is common in
4e encounters, so this balances out things and adds new tactical options for anyone teleporting. A +5 fire damage bonus is applicable even if you teleport just 1 square. I think that is a reasonable tradeoff for a 1 hit point loss.
Answer to #2
At larger distances, micromanaging the 1 hit point per square becomes unmanagable. We went with an overall base damage to simplify things. It becomes very costly in lives to teleport an army a long distance, and Leska is not happy about that. She really wants to hop around the world and destroy the infrastructure (similar to Viet Nam's Tet Offensive).