Houjichasan

For 1)
Div Yield = Div1 / Price0
But return = {[P1-P0] + Div1}/Price 0
[P1-P0]/P0 is the price appreciation portion of return which has been ignored in the DY.
2) Receipt of a dividend payment is more certain than capital appreciation. In order to paint a rosy picture - a company may continue to pay dividends - however it may not have enough sustainable projects / cash flows to show - and hence may not be able to increase its share price. So Dividends continue to be received (much smaller portion of return) but the capital appreciation never occurs.