I find the Pi-hole white/black list function to be too limited for my needs.
I would like to replace the current Pi-hole method with that of the Privoxy +/- block list method. I would use these lists to protect the family LANs. It would be updateable via copy/paste and not require any formal maintenance code.
I would use Privoxy on the individual laptop/desktop computers to keep additional +/- block capability as well as Cookie control and all the other Privoxy features.
The Privoxy code is public and it seems to me that it might be easier to add that code than clean up the Pi-hole white/black list function.
The Yellow Highlighted part allows you to save bandwidth via compression by default it does lzo78 compression but you can choose from 3 others compression types.
And finally to get to your question. Privoxy is a performances based proxy with a lightweight fingerprint to provide https and http proxy features via privacy focused project and along with providing users with advanced filtering capabilities. (It does not do FTP, SOCKS, Gopher, SOCKS5 It only does HTTPS & HTTP if you try and use FTP or any other proxy protocol it will fail and say proxy server is refusing requests.)
**To get faster internet with Privoxy change the highlighted section to 7 if you choose to do 8 or 9 the max compression most sites won’t have clickable links and videos may or may not work. **
And Your Second Question
The point is if you use Privoxy it has advanced filtering abilities that go for privacy and performance which means you get faster internet. But if you don’t use the Pi as the router you can’t use the Privoxy without configuring it on all clients manually, now if you use the Pi as the router and the Privoxy Server via transparent connection you get the full benefits of both and get even extra performance.