No it's because of the bigger sensor. The Air 2 (same thickness as Pro 9.7) and the Pro 12.9 have the same 1/4" sensor, and hence has rubbish quality. It's sad, but people actually do use iPads to take photos, so they just equipped it with the best that they currently have.
Yes and No. The 12.9" iPad Pro is also thicker at 6.9mm vs the iPad Air 2 and iPad Pro 9.7" at 6.1mm so the 12mp camera would stick out much less on the current 12.9" if at all. Of course we all know the next 12.9" will be even thinner so it's probably a moot point going forward.