Hi Carrie1456 and welcome to the forum. I will try to answer your questions.
1. This is something Amazon have decided to do and as you know we have a 'get around' for this which we implemented with your site.
2. There is some confusion here; you are an affiliate of Amazon not the other way around, which means that you are paid a % to sell their products, they are not your products, you are just the middleman.
3. In the code on your site is a reference which is your shop id. When anyone comes through your site and purchases, Amazon knows it is you from that code and will give you a % of the sale. This will then show in your Amazon account. The way to double check this is to login to your Amazon Associates area and look for your id on the left of the page…will be something like turnkeydesig-19. Then vist your wp-admin area, look under pages and find your store page and select edit. You will then see the code for the Amazon store which you will see has your unique id in it.