poison damage confusion

another surely basic question from me, but therefore I hope its easy to answer, still new to the GM and pathfinder in general, and the books love to spread things around and can be overwhelming and certain areas not as informative as id like, example being my question about poison...

1. I am mapping out encounters, and came across poison damage effect on creatures, example being giant spider saying, Bite-injury; save fort DC 14; frequency 1/round for 4 rounds; effect 1d2 strength damage; cure 1 save.

so my questions are about how each part of this works and what it means, I read a lot of stuff about it, but some stuff still elft it unclear

1A. the bite-injury part I assume means the bite attack has to be used, and it has to hit for the effect to happen, am I correct?

2A. I basically am sure I know this, being the next part where it tells you the fort save of 14, and the 1/round for 4 rounds, so I assume that means you have to make the fort check once every round for 4 rounds or until you pass it, as suggested by the end where it says cure 1 save correct? meaning if it said something like fort dc 16 2/round for 5 rounds, would mean youd have to make the check twice every round for 5 rounds, etc. until the cure condition is met?

3A.is the most confused part on my end, the damage, its mostly the fact that its ability damage that throws me off, it says 1d2 strength damage, so I assume that's a d6 with 1-3 = 1 and 4-6 = 2 , and it applies to the strength ability, is it the ability mod or the ability score? and I assume it keeps decreasing each fail of the check, so after you pass the check or the poison ends, how is it healed? does it just go away when you pass the check? or do you have to use cure light wounds or something like that, and if so, how does that work? that was the main thing I couldn't track down is how ability damage resolved and healed

2. also as an off question to ask in this so I don't have to make another post, its about treasure awards in an encounter, one encounter I made has incidental treasure, so I read that means I award half, the APL is 2 right now and so the encounter which is CR3 ranks as a challenging encounter, which I also read, raises the level of treasure by 1, so I should use the treasure for APL of 3, for medium, which is 800 GP and then half it, which is 400 GP ? is that all correct? if so, is that 400 GP total, or for each person? and if its total, how to I handle the payout, just auto do it even as possible, or let them figure out who gets what amount?

thanks

1A: The bite is what delivers the poison, and it must deal damage to inflict the poison (so it can be negated by DR).
2A: With poison, when you're first exposed you make a save, if it's successful you're not poisoned at all. If you fail then you take the effects and continue making 1 save a round until you succeed at the cure conditions (in this case, 1 save).
3A: You can do 1d2 however you want, it's just a representation of a two-side die. Flip a coin. And it's damage to the ability score, not the modifier. You heal ability damage at the rate of 1 a day or you can cure it with Restoration (Lesser, regular, and Greater).

2:Too early for math, sorry.

Bob^3 covered your poison question well, so I'll just answer the treasure one.

You are correct on all your numbers (CR3 at medium advancement = 800 gp, incidental halves it and makes it 400).

The gp value you're left with is the total gold for the whole party, not per person. Just remember to throw the occasional high treasure encounter at the party to compensate for the low treasure fights.

Let the players divvy up the cash as they see fit. If they're like most groups I've seen, they'll give everyone an equal share of the cash and hand magic swag to whoever needs it most.