I'm a Steem Witness since March 2018.
Steem witnesses are rewarded for each block they sign and add to the blockchain. But they also have expenses in order to have a server running 24/7 for doing that work.
The reward used to pay Steem witnesses is from a totally separate pool to the reward used to pay authors and curators. Our reward does not affect the reward pool used to pay your question for example.
If you are interested in how much a Steem witness earn, please have a look at my weekly Witness Earning Report: https://steemit.com/witness-category/@quochuy/witness-earnings-report---2018-10-29
Yes, witnesses are compensated with Steem Power for each block they create.
According to https://steemit.com/witness-category/@klye/the-complete-noob-guide-to-steem-witness-setup witnesses are paid in steem power which can be powered down for steem.