Absolutely -- distortion includes a form of compression -- distortion is when you're hitting the 'ceiling' (my term, not sure what the correct term is) of a circuit, so in all cases (that I know of), it starts to fold back in on itself, never does the distortion do the opposite -- become more dynamic than the same signal without the circuit.
Yes! Overdrive distortion is also called "clipping." That is because the sine wave, instead of being curved at the top of its waveform, becomes "clipped off" because it has exhausted its headroom - in fact, it starts to become a square wave. A Fuzz pedal generates the most extreme distorted square waves, one reason it has a very identifiable sound.
Check out a synth whose oscillators will generate both sine and square waves, and you'll immediately recognize the difference.
Because there's no more headroom, instead of getting more volume as you increase the input gain or the guitar volume, the signal simply saturates and compresses; thus the bass becomes mushier and fattens up, and all the usual overdrive or fuzz artifacts present themselves to a greater degree.
Of course, this can be accomplished by a single pedal, several pedals, the amp alone, or some combination of pedals and amp. There are no rules.
The reason I don't stack distortion pedals is simply to preserve some of the attack and articulation of the note that is often obscured by stacked distortion pedals. However, lately I don't use distortion pedals. I use a boost pedal to get the amp into additional overdrive instead.
No particular biggie, I just like the way it sounds when I do it that way.
Sometimes I'll stack a compression pedal on the boost pedal if I want a more compressed distorted tone, because then I can control the attack and release points of when the compressor kicks in, to preserve the note attack and decay. I also find that the bass doesn't mush up as much using a boost as opposed to a dirt box in front of an overdriven amp.
As I said, no rules...it's all in how you want to control what comes out of that speaker cab...