Answers:
That statement is actually not accurate, for Venice was built to be just how it is today: surrounded by water. The city is right at sea level, and it's main streets are actually waterways! How convenient!
Because it is built on a lagoon. Why it is built on a lagoon I don't know, but there it is.
For the same reason that New Orleans was built below sea level.
it sunk
It was built on marshlands
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