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Is the GFCI wired correctly. Voltage in goes to LINE. Voltage out goes to LOAD. Ground wires connect together and connected to ground on GFCI. All screws tight. If all this is correct and you have no loose wires on any of the outlets and no wires are shorted out in any of the outlets then more than likely you have a defective GFCI. Replace it with another one. I get bad ones all the time.
In a house, usually all the outlets in a room are on one breaker or fuse. Each thing plugged into those outlets consumes some electrical power. This is a number rated in Watts. In this case, the more Watts something consumes, the higher the current is (measured in Amps) in the wires that connect the outlets to the main power in the breaker box. The current in power circuit must be limited for safety reasons. The wires in the walls can only handle a certain amount of current safely. If too much current flows the wires can become extremely hot, possibly starting a fire.
Yes, the plastic in a wall outlet can over time get brittle. I recommend you replace any outlets and switches that are over 20 years old. I recommend you replace them and wire them by wrapping the wires around the screws and not by inserting the wires in the spring tension holes on the back of the outlets. An outlet that is subject to repeated plug ins and unplugging of a device should be replaced every 10 years.
On an electrical schematic it designates that the wires are all connected together. It is called a connection point.
I believe you've managed to turn wires inside out. (conducting) wires are covered in insulating plastic. And it is done this way to prevent electrical energy from going where it is not wanted, such as into you.