I'm trying to understand all the basic connections of a MOSFET. These questions may seem very basic but I have flipped every single textbook I own and googled every single website and never found a clear cut answer to the following questions. I would appreciate all the help I can get.

1)Why is the MOSFET source connected to bulk? Is there any specific situation where the bulk isn't connected to the source? From what I have gathered, the bulk is connected to the source to establish a stable threshold voltage. If so, could we connect the bulk of a PMOS to ground and NMOS to Vdd? What difference would it make? 

2)A MOSFET can function as a diode when the gate is connected to the drain. I don't really understand the physical operation behind this. However, this does make sense mathematically, as the MOSFET will always be in saturation. The current is given by, u*Cox(W/2L)*(Vgs-Vth)^2, which means that the current graph will be quadratic which is ALMOST but not identical as the exponential equation of that of a diode. My question is, how does the performance of a MOSFET connected diode compare to that of a PN diode?

3)Of late I have seen many Rectifier circuits in IC design use MOSFET connected diodes instead of PN diodes. Is there a specific reason for this? Wouldn't a MOSFET have a relatively large area overhead when compared to using PN diode in IC design?

Your help is very much appreciated. Thanksss!!!