You're seeing two things here: the exact match coin selection algorithm, and the fact that your vsize is computed before adding signatures.
The coin selection algorithm in Bitcoin Core tries to find an "exact match" of UTXOs to spend in order to pay, without adding a change output back to you. If the input amount is a bit too large, it is ...
I can't say for sure, but two options come to mind: a) the "price" of financial assets are the current bid/ask and general average of closed transactions. You might have been on the high end of the average. You should verify the deal details before purchase/sale. b) some exchanges charge a premium to the parties, again, know the details before you ...
why would someone choose to use bitcoin and pay a transaction fee over
fiat currency without a fee?
what are the specific use cases that make it more appealing, even with
the necessity of transaction fees?
Bitcoin as a form of payment offers great incentives to both buyer and seller depending on the transaction use case involved, regardless of the ...
Does that mean that Bitcoin Core implicitly calculates and sets a smart fee for a given block target?
Yes that's how fee estimation work (basically statistics are made out of the transactions you relay given their feerate and how many blocks it takes for them to be confirmed).
If so what is the priorities if I:
Set TX fee explicitly before
There are two scenarios we could see as the block subsidy (inflation) halves every ~4 years:
The number of fee-paying transactions increase per block whilst median next-block fee remains low/negligible
The fee per on-chain transaction increases
We are currently seeing scenario 2 play out, where most user transactions are expected to take place off-chain. ...
Compare this with the increasing adoption of contactless payment in western countries. There is a fee involved but it is small and invisible to the consumer. The retailer pays the fee (and passes the cost to the consumer in higher prices).
So long as the transaction fees are low, and people value the other benefits, this won't be a problem.