1) PME (TN-C-S) - The neutral current could well return through various other paths, this is called 'circulating network currents'. You may also find current from other parts of the network flowing through your N-E join and then down the CNE conductor. You also get ground currents, where the current flows through the mass of the ground. These currents are all usually fairly small, compared to the actual load of the supply, as the neutral is usually of a lower impedance, and hence the current is going to flow that way as prefered route.
There are some instances where PME is not allowed. A petrol forcourt being the most obvious - Circulating network currents in the earthing of a petrol forcourt with metal pumps, metal tanks etc etc is not good - A little corrosion on the tank or joint could spark with these currents flowing through them.
Swimming pools and communal showers etc are also not meant to have a PME earthing due to voltage drops caused by circulating network currents. These voltage drops can present a potential difference between earthed metalwork and mother earth (the ground / floor). You may then recieve what is known as a 'perceived' shock, as the actuall voltage is not going to be anywhere near 240v, but enough to make you take notice.
Another example is an outside tap - It is actually recommended to supply an outside tap with an insulated section of pipework to ensure the tap is not connected to the PME earthing terminal. This is rarely done. In my area it is not uncommon to here surfers talk of 'percieved shock' (*they have no idea whats going on*). They come back from the beach bare foot, stand on the grass and turn the tap on to wash their board/wet suit. As the earth may be at a different potential than the tap, you may recieve a tingle. This tingle being more prominent if the ground is wet.........so when you turn the tap off
2) The r1+r2 is the physical resistance of the Live and Earth loop. This resistance is added to the Ze to give a Zs for the circuit. The Zs is the resistance of the entire earth fault loop (inc back the network cable and through the transformer). This resistance (or impedance as it is better refered to) limits the current somewhat during a fault. For example:
If your Zs at the final circuit is 1.05ohm, at 230v, 219amps would flow for the duration of the fault. Obviously this current will only flow for a fraction of a second (hopefully) until the MCB or similar operates. We use this 219amps figure to determine (using the current charts at the back of BS7671) the time it will take for the MCB to operate. We must check this operates within the disconnection time specified for the circuit. Typically 0.4seconds for sockets, but 5 seconds for fixed equipment.