You need to have home-sharing enabled on Apple Tv (via settings) and iTunes on your computer (advanced). Then in iTunes go to advanced - choose photos to share. Your computer needs to be on and running iTunes for your library to be recognized on the device.
That is correct. That is how the content is transmitted. If the computer is off or asleep there is nothing for the ATV to see.
Mountain Lion enables mirroring (on recent Macs), which is different. This transmits everything that you see on your Mac onto the ATV in real time.
Basic airplay is only for audio/video stored within iTunes that is in a format ATV can recognize.
iCloud access would enable you to stream past purchases of Movies and TV shows as well as Photo stream. If you subscribe to iTunes match you can then access your music directly as well.