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I've seen a few razors with that squiggle-type oxidation. You're right--it goes almost all the way through the razor. Sometimes the razor isn't worth saving, because the squiggle will keep chipping...

It definitely varies. For an average eBay razor in decent shape, I'm usually done in about 10 or 15 minutes. The first 8-12 minutes is spent on the coarser hones, resetting the edge. I've gotten...

"Setting the bevel" really means that you're spending some extra time honing the razor to remove damage, like chips or a rounded-over edge. Or sometimes the existing bevel won't be at the right angle...