Irrelevant. The point is that getting pirated video onto the Apple TV is at most one extra step. A lot of torrents are already mp4, in which case there is no extra step.

AirPlay works with any video from the iPod/Music/Videos apps. One can import any video (including tormented TV shows) into iTunes and thus into these apps. It most certainly is AirPlay, although Apple would prefer people to just buy from their store.

Sorry, you're just wrong. The feature in iTunes that lets you stream your videos to an Apple TV is called AirPlay and uses the same protocol as iOS devices.

AirPlay actually has its origins in AirTunes, which was originally only accessible through iTunes. These days there are even third party senders and receivers for AirPlay, so in principal you can use AirPlay without actually using any first-party Apple software or hardware.