1: My first question about MySQL: is the data (not the SQL/DDL table structure) stored in any file format (text based or binary) on the server by default?
Yes it is stored. The extension depends on the table type say ISAM or MyISAM or whatever. Some file formats are not OS independent. So a brute copy from one machine to another will NOT work.
2: I've read that you can backup your all your data and SQL-schema into a single text file using "MySQLdump". Can this single ".txt" file also handle large binary fields containig many BLOBs (i.e.: images, PDFs, etc.)?
Don't know, try it out. It has worked for me in all other field types.
3: What is the best and/or most common practice on how developers upload MySQL data to remote Web-Hosts/ISPs?
mysqldump to a file, move file from one place to another via ftp then login into mysql and
source %your dumpfile here%;
Saludos
Gerardo