Right, universe stuff. I've never actually been to wherever mortal humans live in my reality, so I don't know how it works for them? But in hell it's how overlords cement power. Protection deals, mostly, but they can get a lot weirder.
Mm, yes and no. Some of them, you take away their contracts, they wouldn't have a lot left. Some deal mostly fairly, not that they're safe, just, honest about how they'll fuck you. Some have spun the power from souls into all the other kinds of power that make hell the delightful place it is.
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May I assume Overlords to be a particularly powerful type of demon?
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[Phrasing it as "your Hell" is probably something of a clue to what Sebastian himself is. It's not like he bothers to keep it a secret these days.]
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