1) I use Drobbox, Box, Google Drive, SurDoc and a few others. (One pretty much just has a full backup of a website. Google Drive has the ROMS for my phone, my app bckups and password data file. Different cloud servers for different uses.
2) a) Google doesn't have time to look through everyone's data and, most likely, if an employee was found doing that he'd be fired - most likely from a cannon. I've dealt with customer proprietary data - to the point that I actually caught some zipcodes that were for the wrong state [they used the store zipcode for an out-of-state customer) or the phone area code was wrong - in a brick and mortar store. Trust me - if someone had asked me to find the zipcode I fixed 5 minutes ago, it would have been impossible. You do the work, then move on to the next thing, or you're not doing the job properly and get fired for not producing results. So even if Google were, say, scanning your picture file names for something that looked like kiddie porn (they actually do that by computer - no humans involved), anyone remembering the name of one of your files for more than a few seconds would be fired for laziness. b) No, one cloud storage server isn't connected to another cloud storage server - there's no "hierarchy" of cloud servers. (Except through the NSA, which probably knows what you're thinking 5 minutes before you think it).
I make sure that any file I don't want to lose is backed up to my NAS (a drive connected to my home network), and at least 2 cloud servers, each in a part of the continent. If California slips into the ocean at the same time my NAS gets fried, I still have at least one backup. I don't waste time creating data I don't need, so if I have it I back it up. (Say "backing up isn't important" to a young mother whose baby's first step was on a picture on a phone a car just ran over, and wasn't backed up anywhere.)