1. Just because you bought something, like a game or movie, it does not mean you can redistribute the content freely. You have to ask yourself if the purpose for which you're using it falls under fair use.
2. It depends. More often than not, you need approval, but you can show small clips of the product in question and review it. Top 10/20 etc are fair use. However, if you start showing 10 minutes of each game, then you're showing way more than what its intended purpose was. Also, if your review shows, let's say, all cutscenes or even the ending, then it has the potential to prevent people from getting the game since they already know what happens. You need approval, preferably a written/recorded approval, or you could get sued since it damages sales for the copyright holder.
It's impossible for any company to review all videos that are uploaded to youtube daily. ContentID does not check for fair use. I think this system is meant to filter what is essentially not allow even if it falls under fair use, and then people can counter those claims. That would be the easiest way for google to manage such a large number of videos. There are still flaws in the system, but ultimately, this is the "best" way to deal with things unless you want them to check each video, which could take months and even years for a single video.