Yes, the players do decline in performance as they get older. Their ratings stay the same but ratings are only POTENTIAL performance factors. They are much less likely to play up to their potential when they are older
Beta Compass (your league) has a lot of weaker teams in it (Delta Premier and Theta Premier are the strongest leagues). So you have less competition for the good FAs, and in general that means your FA pool will always be pretty good.
Yeah, FA pools have lots of talent. Acquiring good free agents (and releasing your bad minor league players) is a great way for new teams to improve quickly.