1) I'm not good at at all, but like any other dialects in Japan, is rather quickly disappearing. I believe only old people in rural areas of Tohoku region can speak fluent today. Even in this novel written more than 80 years ago, is used as a role-language that represents country kids ( uses standard Japanese).
2) Fairy tales and folklore (e.g., , ) are usually conveyed in this style. is more like a than a , so I think this writing style was natural to him. People may intentionally choose this writing style when they write an allegorical story or children's story (for example, see by ).