1) Do we really need retina? Is it that neccessary? Would you still use an original Macbook without retina?: For pro video editors, photoshoppers, etc. The retina display would change and revolutionize their work. For normal workers, web browsing, etc, we do not need retina.
2) Would all applications look effective with retina? (meaning no blurriness): Applications looks sharp without retina. Retina just enhances them.