Answer from cs61c-an (Ben Weil 16819970) for Question 1
The c preprocessor allows the programmer to use certain symbols to represent specified values, for example #define a 1, allows the programmer to use a as the value 1 throughout the program.  The preprocessor is given information in C and replaces the symbol with that code.  In the diagram, the preprocessor values would be exchanged immediately before compilation of the program.