What is Layer 2? Confused

I've been hearing this terminology alot recently. Using a layer 2 solution sounds like its the magical solution to all problems. I'm just confused and have alot of questions about what this even means, if you could help clear any of these things up for me.

1. Why can you do a "layer 2"? What does this mean? If something was built as a layer 2 on Ethereum, what are the restrictions for it? Why can't you do the same thing on Bitcoin?
2. I've heard some people (newbies) say that they should just make a smart contract layer 2 on bitcoin since it's more secure, so that we don't need to use Ethereum. Is this actually possible? I know that bitcoin can't handle smart contracts because it's not turing complete, what about a layer 2 on bitcoin? Do layer 2 solutions on bitcoin actually remove the purpose of Ethereum?
3. I noticed that alot of dapps are going to be using layer 2 solutions, to get past the issue with transaction fees currently on Ethereum. Does this mean the existence of a dapp on layer 2 will not affect ethereum prices at all, and does not benefit ethereum? For example, if a dapp were on Ethereum, then there would be a large inflow of ethereum buyers increasing the demand for Ethereum. But dapps on layer 2 don't need ethereum tokens, there would be another token instead, so the users of such an app would not be buying Ethereum tokens.
4. For dapps that do run on Ethereum, after EIP1559 implements gas burning, wouldn't this mean that a ton of eth is going to be burned into nowhere from just dapp usage? This would raise the price of eth.

Thank you