Before continuing with this, let me make it clear that I'm an avast user like yourself and there are things I just don't know (how a function works under the skin) as I'm not an avast employee. So for the most part I have a good idea of how it functions but not the underlying detail.
1. Yes, the Web Shield is active by default and scans your web browsing (before it is actually displayed in your browser) or in the case of downloads before they are saved to your hard drive.
2. It would be a very rare case when the ISS actually slows browsing (page rendering) hence the reason it is in the troubleshooting. There are many other unrelated factors that may slow browsers, so it is hard to say what is responsible.
Those with very fast internet connections (estimated at over 100Mbps) may find that the volume of data could create a bottle neck whilst the processor catches up, I don't believe these scans are done in memory.
If you look in the C:\WINDOWS\Temp\_avast_ folder this is where avast unpacks and or sends copies of a file to be scanned. What I don't know is if the ISS streaming would be done in memory (rather than send it to the _avast_ folder for scanning).
For speed scanning in memory would be fine assuming the system has enough RAM to support it whilst having multiple other programs running. If RAM isn't plentiful or fast, then that could create a bottleneck (in the same way as a slow CPU on fast broadband), as other data in RAM would have to be switched out to the pagefile.sys location.
As you can see there are functions that I as an avast user can't go into detail about, only my understand of how I see it working as an avast user.