Hi Karan,
Q 1 ---> InfoProvider is Infocube
The only reason for usage of SID is for faster access from the star schema, to understand which tables are associated and accessed when data is to be retrived from Cube you will need to understand the concept of Star Schema and its associated tables (Fact >Dimension>SID>Master Data). Again to understand in detail there are differnt settings to be maintained maintained at the Cube level for masterdata obects to appear/display in the query level
In short the master data will be accesed only if the corresponding data exists in the Fact Table, once retrived vis Dim ID and SID the masterdata will then look for its display attributes from the M/P/T/X table
Q-2 --> Aggregation on Infoprovider Level (Infoobject)
I am not sure how your data models are built but there is a difference how DSO and Cube records are updated, the former being flat table with key fields and the latter having additive property
Thanks
Abhishek Shanbhogue