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ELI5 the whole Wayland vs X11 going on.
(programming.dev)
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Does that mean that every application will need to be updated to work with Wayland?
Yes, nominally, but there is a layer called XWayland to support backwards compatibility, so it's not really a concern.
In theory yes. In practice most X11 applications can be ran using Xwayland as a compatibility layer
Additionally any application using a GUI toolkit (like kde, qt or gtk etc) only needs to to update to a version that has native Wayland support. Which means most applications already support it. At least if they don't use any X11 APIs directly (which is not that common).