A function being analytic at a means the Taylor Series for the function at a converges to the function itself in an open interval centered at a. Taylor Series fails to describe what happen at the point a and the inside of the function. In question 2, the function is not analytic at a=0 because the Taylor Series at a=0 (the Maclaurin Series for it) is not convergent to it.
For example, function y=x^2 is analytic at any points on its domain. Its infinitely differentiable and its Taylor Series at every point is convergent to x^2.
Another example for non-analytic function is y=|x|. It is not analytic at x=0. Because its not eifferentiable at that point , we cannot even write a taylor series for it.
This concept is important since calculus aims to describe the inside of a function and it is both necessary and interesting to know when it does not work.
All the analytic functions must be infinitely differentiable but not all the infinitely differentiable functions are analytic.