I'm not sure the idea batteries are stagnating is really accurate, especially since some of the material science advancements that would help hydrogen would also help batteries, especially graphene and fullerenes. Having said that, a quick poke around seems to hydrogen storage isn't as stagnated as I'd thought with metal-organic frameworks becoming potential contenders[0]. Not sure that's enough to save hydrogen from the rest of its pitfalls, but it does make things interesting.
Nope. You pretty much have it covered. Hydrogen was very appealing when battery and hydrogen storage both needed significant development, but batteries have come a long way while hydrogen storage hasn't moved much, if at all.
Yes, up to 35% during the Carboniferous period, which allowed a whole host of creatures to get much bigger than they are today. I'm not sure when it dropped to the modern 21%, though.
[0] https://news.northwestern.edu/stories/2020/04/gas-storage-me...