My girls are starting to crawl and for me, the top and bottom walls are still an added bonus. One of them likes to arch her back so the top keeps her from scooting up. The other is a wiggler and tries to scoot down. The sides are cushy enough to not bother them if they lay their feet or calves on them, but has just enough of a bump even when squished to catch their scooting bottom if they even get that far. They both like to brace their feet on the end too. It's relative though and all depends on the baby I suppose.
Yes, As the baby becomes longer than the distances in between the raised sides, however I just bring him down a little to make the head fit flat on the pad since the legs are raised anyway for a diaper change and it's okay if they bend over the bottom raised side.