1> Yes, pax demand does increase over time, but at least for now it's not country/region-specific. So, if worldwide pax traffic increased by 7% between 2002 and 2003, we've got that here. But, the reality being that some went down and some (smaller ones in particular) went way up is not.
2> No, Lufthansa can't just go open a base in a non-EU country. And I doubt sami's going to be changing that restriction anytime soon no matter how small a country may be. Frankly in most of those countries growth opportunities would be pretty lousy no matter what the rules were, as they're simply too small. And then there's the likes of Singapore or Hong Kong who don't have more than a single airport. It's just one of those things that's got to be considered, just as in real-life, when picking a place to make an airline.