This is only to answer the first question

> Why are there different levels of MySQL collation/charsets? 

There are two good reasons for different character sets and collations 

#Reason #1 : Disk Space

When you run this query

    SELECT
        maxlen,
        GROUP_CONCAT(CHARACTER_SET_NAME) CharSets,
        COUNT(1) CharSetCount
    FROM information_schema.character_sets
    GROUP BY maxlen\G

You get this:

    mysql> SELECT
        ->     maxlen,
        ->     GROUP_CONCAT(CHARACTER_SET_NAME) CharSets,
        ->     COUNT(1) CharSetCount
        -> FROM information_schema.character_sets
        -> GROUP BY maxlen\G
    *************************** 1. row ***************************
          maxlen: 1
        CharSets: cp1257,cp850,binary,koi8r,latin2,ascii,tis620,koi8u,greek,armscii8,keybcs2,macroman,latin7,cp1251,cp1256,dec8,hp8,geostd8,latin1,swe7,hebrew,cp1250,latin5,cp866,macce,cp852
    CharSetCount: 26
    *************************** 2. row ***************************
          maxlen: 2
        CharSets: big5,cp932,sjis,gbk,ucs2,euckr,gb2312
    CharSetCount: 7
    *************************** 3. row ***************************
          maxlen: 3
        CharSets: eucjpms,ujis,utf8
    CharSetCount: 3
    *************************** 4. row ***************************
          maxlen: 4
        CharSets: utf16,utf32,utf8mb4
    CharSetCount: 3
    4 rows in set (0.00 sec)
    
    mysql>

Some character sets have a Maximum Length of 1 byte to represent a character. Other need more. Give this information, you may want to refrain from using the eucjpms, ujis, utf8, utf16, utf32, utf8mb4 character sets so that VARCHAR and TEXT data takes less space on disk.

#Reason #2 : Internationalization

Characters Sets Each Come With One or More Collations to cover a variety of Languages

When you run this query

    SELECT
        A.CHARACTER_SET_NAME,
        GROUP_CONCAT(COLLATION_NAME) Collations,
        COUNT(1) CollationCount
    FROM
        information_schema.character_sets A
        INNER JOIN information_schema.collations B
        USING (CHARACTER_SET_NAME)
    GROUP BY A.CHARACTER_SET_NAME\G

You will see that some Characters Sets have with multiple collations for Different Parts of Europe. Chinese, Japanese, Greek, and parts of Asia Minor and Scandinavia are also available.