@storealex
I'm not as well-versed as Khaghan, but I think I can answer your questions.
Re 1):
The current territory of China IS conquered territory. The original China consists only of the Yellow River valley. Then it slowly expanded in all directions absorbing the neighboring tribes. And assimilating them so thoroughly no vestiges remain of these cultures. Later on, it's southward expansion encompassed the Yangtze River too. And still later even further south. Beijing was merely a minor town along the periphery during the Warring States period. That's already after at least 1500+ years already of Chinese history, a couple hundred years more if you include the Xia.

As for the place I'm currently in, it's actually considered southern barbarian territory as late as the 3 Kingdoms period.

And at one time or another, China also held northern Vietnam, northern Korea and yes, parts of central Asia. In fact, linguistically and culturally Xinjiang IS Central Asian.
A few notable large kingdoms (with a distinct culture) that no longer exist:
1) Ba and Shu in today's Szechuan and Yunnan - eliminated by Qin during the Warring States.
2) Yueh in today's Fujian - eliminated during the Han.
3) Numerous southern Man kingdoms - eliminated during the 3 Kingdoms period.
4) 16 (!) nomad kingdoms in northern China during the North-South dynasty era. (Well, technically they sort of destroyed each other by themselves, but the final winner there, Bei Wei, was urbanized and Sinicized already, and no longer a nomad kingdom by the time of it's victory.)
5) Liao in Manchuria - eliminated during the Song. (in collaboration with the Jin, who then turned on the Song and took northern China.)
6) The Jin and Xi Xia in northern China, Bohai in Manchuria and Dali in today's Yunnan plus northern Laos and Burma - eliminated by the Mongols.
The current Manchuria, Mongolia (partly), Xinjiang and Tibet all were incorporated into China under the Qing. Prior to that there were other independent kingdoms in all these territories.
And of course, there existed also all sorts of minor tribes, kingdoms and clans which were slowly absorbed all these millenia. Records are sadly incomplete, and sometimes even conflicting. Thankfully, modern archaeology is slowly shedding light on these.