Yes. When the kids move away from the center, the merry-go-round will slow down. If they then return to the center, the merry-go-round will speed up!
Yes. If you go over a loop-the-loop too slowly, so that you don’t accelerate downward quickly enough, you will leave the track and fall. That’s why some roller coasters strap you in carefully before taking you upside-down slowly. Without the supports, you would fall out of the car.
As you travel over the top of the loop the loop, you observe the world from an inverted perspective. The sky is below you and the ground is above you. If you were to take a coin out of your pocket and release it, you would see it fall toward your seat. From that observation, and the feeling of being pressed into your seat, you might think that gravity is suddenly pulling you toward the sky. It isn’t. Gravity is still pulling you toward the ground, but you are in a car that is accelerating rapidly toward the ground. As a result, the car is having to push you toward the ground with a force on the seat of your pants. You feel pressed into your seat because the car is pushing you downward hard. When you release the coin, it seems to fall toward the sky, but it’s really just falling more slowly than you are. With the car pushing you downward, you’re accelerating toward the ground faster than the coin and you overtake it on the way down. It drifts toward the seat of the car because the car seat accelerates toward it. As you can see, the only forces around are the force of gravity and support forces from the car. There is no outward or upward force here. The fictitious force is truly fictional; a way of talking about the strange pull you feel toward the outside of the loop.