Topic: jQuery newbie trying to understand

I'm a definite Rails newbie having just completed the Ruby on Rails 3 Tutorial.

Now there was some small section on Ajax and Rails and the code in the tutorial didn't work. I finally got it to work but I'd like to understand a few things. By the way I'm using the latest version of Ruby, Rails and jQuery.

Tutorial code in a 'create.js.erb' file:

$("followers").update('<%= "#{@user.followers.count} followers" %>')

Working code in a 'create.js.erb' file:

jQuery($("#followers").html('<%= "#{@user.followers.count} followers" %>'))

1. Why does the whole command need to be encapsulated in a 'jQuery' function call? I did try without it but couldn't get it to work.
2. When do the jQuery commands get translated to JS? Is this done by the server and the jRails gem or client side by the jQuery.js library?
3. Is the # for an ID to find, and html instead of update due to the Tutorial code being in Prototype rather than jQuery?

Thanks for anyone that can answer these relative simple questions (I would assume).