1. Servlets are Java classes that handle web requests and responses. They are used to create dynamic web content and interface with databases. The servlet handles processing like form handling and database queries, while JSP formats the results.
2. The document provides instructions on creating a basic "Hello World" servlet that generates plain text. It discusses servlet structure, compiling, installing in the web server, and invoking the servlet URL.
3. It describes enhancing the servlet to generate HTML instead of plain text. This involves setting the content type header and printing HTML tags and content. Utilities are introduced to simplify generating repetitive HTML structures like the DOCTYPE and page head/title.