Data and contracts on the Ethereum network are encoded, but not encrypted. Everyone can audit the behavior of the contracts and the data sent to them. However, you are always free to encrypt data locally before broadcasting it to the network.
No!
There is no encryption as part of the Ethereum protocol—all messages that are sent as part of the operation of the Ethereum network can (necessarily) be read by everyone. As such, private keys are only used to create digital signatures for transaction authentication.