The one I took was a night train to/from Xian, and had fixed beds instead of seats. It makes sense for bigger cities to have this sort of a service available, but it would also make sense if smaller cities have these as daytime trains with proper seats.
Never seen a sleeper only train! But maybe they exist?
Definitely they do, I remember not being able to sit because of the sleeper bed position, but people still smoking standing outside the cabin.