1) They usually just measure the amount of effort a person has put into studying interview questions. Whether or not the ability to do this translates to being a better engineer is debatable.
2) An interviewer almost always exercise some form of personal bias, whether it be educational, personal, etc. This doesn't always show up in written feedback, but the interviewers with stronger personalities usually dominate interview debriefs, and often influence others into hire/no-hire decisions. This is especially prevalent in smaller startups where the process is more informal, things move quickly, and decisions are based more on gut feelings.