1. Because according to his story he had no chance to adventure or do any serious job. He was a servent. A slave. Still, he will lvl up rapidly. In my last game he had 14 level when I left to Spellhold - the same level as Dorn. Neera - which I joined before these two - had 15 level. I believe that's as it should be.
2. Because he can't. You must have some additional mods which probably affect rules. I attach the picture to prove it. I'm in the Underdark, that would be reason for looking like a drow.
3. There are talks, interjections,few (but only few) new spells for him to learn. In ToB he got a mini-quest. He also has his very own HLA.
4. I believe he's not "squishy" and I'm not sure what other mage you use. Plus, he was written to be a 2nd mage in your group, not the only one. He has some quite powerful spells. There are two which can deal damage to those with magic resistance etc. (only two, because that's usually not an option for mage, but these spells "throw" stuff at enemies, so...). His sword may provide a magical rest. There are many features I included to balance the lack of huge spell choice. It's a matter of finding those options.
I am quite happy with how Foundling sounds and what he introduces into the game. I believe that he's well balanced, however if you install mods like SCS it may look differently. I play games for stories and I don't use mods that would make my game extra hard. I also do not use mega-mods, BGT or BiG World etc so I don't end up with 20th level before Spellhold
Until now I found 2 spells that appear to be buggy, I hope to fix those once SHS if fixed and I can upload files.
Thanks for your comment and cheers.