How does altitude affect the speed of sound?
I read once that Mach speed decreases as altitude increases.


The speed of sound is solely dependant on temperature. 

$$
M = \sqrt{\gamma RT}
$$

where $\gamma$ is the ratio of specific heats, $R$ is the molar gas constant and $T$ is the temprature in Kelvin. For Earth's athmosphere at 15° Celsius, 

$$
M=\sqrt{1.4\times 287\times 288.15}=340\,\text{m}/\text{s}
$$

Does temprature decrease with altitude? Well, not always as can be seen by the international standard atmosphere:


(source: cam.ac.uk)  


  ....are the pressure waves made at high altitude lesser than the ones at
  low altitude because of the difference in air pressure?


There is no simple answer to this. Here's NASA's opinion:


  Altitude determines the distance shock waves travel before reaching
  the ground, and this has the most significant effect on intensity. As
  the shock cone gets wider, and it moves outward and downward, its
  strength is reduced. Generally, the higher the aircraft, the greater
  the distance the shock wave must travel, reducing the intensity of the
  sonic boom. Of all the factors influencing sonic booms, increasing
  altitude is the most effective method of reducing sonic boom
  intensity.