Dry fire is fantastic and an absolute requirement if you want to be good. I believe at the earlier stages of your shooting career about 80% of your practice should be dry fire (a coach would be great too).
I also think that looking for an increase in classification is potentially limiting your development through dry fire. Work on all aspects of your shooting...if as a by product you become an M or GM....fantastic....don't make that your overall goal (a big mistake that I made).
In dry fire there is no simulating recoil....we are trying to improve our overall technique and economy of motion, not use it as a substitute for live fire.
For your second question, the way I read it is that you are keeping your eyes on your sights through the arc of the transition. The reason this is bad to do in dry fire (other than the fact it is terribly slow and tedious) is because one: this isn't what you are going to be doing in live fire (I hope), and two: anything that you practice becomes a part of you. If you practice "shooting" sloppy points in dry fire and when it comes, live fire, that is exactly what you can expect on match day.
In dry fire it is incredibly important to call A's with every shot.
Also another thing....I firmly believe about half of your reps in dry fire should be done in slow motion as that is the absolute BEST way to refine your economy of motion.