If for the equation derived by Chris Wuthrich, we introduce the new variables $p = 2P$, $q = x - P/2$, $r = y-P/2$, we obtain the more symmetric relation $$ pqr(p+q+r) = A^2. $$ Now I knew I recognized this equation from somewhere, and after a little searching I hit upon some slides by Noam Elkies where your Question 1 is resolved completely. (Elkies further credits Franz Lemmermeyer with bringing this problem under his attention.)
It seems that the credit for this goes to Euler. The surface described by the equation above has a K3 surface with maximal Picard rank ($\rho=20$) as its smooth model. Euler presumably used the elliptic fibrations and the presence of many rational curves on the surface to produce a $1$-parameter family of solutionsolutions (as suggested by Will Sawin).