1) I remember loving "The Age of Spiritual Machines" concept album as a kid. I just didn't realize it was Ray Kurzweil and the ideas from his books that the album was based around until afterwards. I still love that album though! And I agree that it is a very dark album, which makes little sense considering how optimistic Kurzweil is.

2) Inevitable conservatism may have something to do with your incredulity. The idea of the singularity is so massive and so transformative it is hard for me to wrap my mind around sometimes as well. Re: advances in understanding the brain, I suggest you pick up his new book that comes out in November. It is all about how to build a mind.

3) We are hitting "laws of physics type limitations" in terms of microprocessing, but that is because we haven't started making them in 3 dimensions. When we do it will be the end of Moore's Law but it will not be the end of exponential growth for computer based technologies. That level won't be reached until post-singularity (according to Kurzweil). Kurzweil continues to argue that once that level is reached the only way to make a computer more powerful would be to build bigger, which strong A.I. would do, turning essentially all inanimate matter into a computer (i.e. Earth, moon, etc.)

4) I couldn't agree more re: the interesting moral questions.