Here's the thing, you obviously can't use your grabbing hand to attack other creatures because it's currently occupied. You can execute the full attack while still grappling, and if you hit the creature you're already grappling, you "grab" again and can maintain (deciding what to do with the maintain as normal). Technically you can hit it with any grabbing attack and progress the grapple, which personally I think can be *too* good or offensive with things that have more than 2 grabs, like say an octopus or sand kraken with 8+ grabs.
I usually house rule and limit it to essentially calling which of your grabbing attacks to be the one that is already grappling, and when you roll the attack to hit again, and assuming you do to grab, only that one get to be treated as maintaining. The others are treated as initiating the grab when you are forced to move onto them because you either missed the "called" attack or failed the subsequent maintain.
Pathfinders grappling rules are a bit confusing…
First you initiate with a CMB (simple enough)
Next your opponent can attempt to escape on their turn.
If they are still grappled when your turn comes back around you can choose to maintain the grapple (normally a standard action), release the grapple (a free action), or hold the target (free action grapple check at -20).
If you succeed on the maintain you can deal damage with the grappling appendage or a single attack automatically. Alternatively you can progress the grapple into a Pin.
If you opted to hold and succeed on the check you can perform a full attack while maintaining the target in a grapple.
You can only do the hold if you have the grab ability, also it gets decided when to initiate the grapple, and it's not a free action, it's a normal maintain but you just don't gain the grapple condition (really worthless imo). I think it may have meant that if you take the -20 on the initial grab, it works like old 3e grapple where it didn't require any maintaining effort (standard action round over round), you had to be the one to break out, and you took the base (in 3e only, not in PF) and constrict damage of the grabbing attack every round, but the limb was considered just occupied. So when you then spent no actions to maintain as this -20 meant you automatically maintained, you would then have your full attack sans the occupied grab attack. But it also isn't exactly what's said.
If it chooses to do the latter, it takes a –20 penalty on its CMB check to make and maintain the grapple, but does not gain the grappled condition itself. A successful hold does not deal any extra damage unless the creature also has the constrict special attack.
Again, grapple is confusing and messy and sadly always has been in PF.
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1) " (which can still beat some targets on a good roll if they roll poorly)."
No, in Pathfinder CMD is a static value, you don't roll defensively.
2) " You can execute the full attack while still grappling,"
[b[Only[/b] if you have a way to maintain grapple as a free action. Normally maintaining a grapple is a standard action, and that precludes you from making a full attack (and generally any attack).