First question: No, not all free games have advertising, but many do or they are 'lite' versions, which are basically demos.
Second question: None that I've seen. If you pay, ads are usually gone.
Ads in games are an alternate way of letting people play games for free but still generates revenue for the developer. Usually the ads only show up in menus and such and are not on display of the main game, so they're as unobtrusive as possible.
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