Its from the ground's point of view, not the planet, also the scene cuts off before we see the full extent of the explosion.
No, we go by what we see the dimension consists of, when someone is brought to a dimension with a starry sky, that dimension is 4A. Unless the databook consistently calls Kaguya's realms world/planet, it is a dimension. Like "Dimension of sand", "Dimension of Ice", and "Dimension of Lava", which is why her realms are dimensions. Also, look at the dialogue during the Kaguya battle, they clearly say she's changing the whole space, not just the planet. And the databook also says that Naruto has to 'float around through space' you can't float through a planet, to float would mean there's no gravity, which means space. The same databook scan says, "Battle in space".