Hi Squirrel,
That accounts for 10" of the 12" and if there isn’t more than “about an inch or so” of lower quality materials in the rest of the upper layers of the mattress then there would be no weak links in its design.
Talalay latex generally has a somewhat “sweet” smell that usually isn’t offensive and generally dissipates fairly quickly. There is more about the typical smell of latex in post #2 here.
If the wool is mixed in with hollofill fibers then your mattress probably has a fire retardant barrier in addition to the wool. It generally takes about 1.8 oz/sq ft (and often more) of wool to pass the burn test by itself consistently.
This depends entirely on your budget, your preferences, how well a mattress matches your specific needs and preferences in terms of PPP, and on all the parts of your personal value equation and the tradeoffs that are most important to you. There is a little more about an all latex mattress vs a latex/polyfoam hybrid in post #2 here which may also be helpful but again these types of choices would be based on your own criteria and preferences.
Phoenix