a) Because David, like the majority of other OVW/HWA/developmental talent, wasn't up for the draft. (Lesnar, Mark Henry, and Rico are presumably being bumped up to the big leagues, but they're exceptions.)
b) Dunno. I think that'd be a pretty amusing angle, but then I'm a Test mark. Of course, just because Test shows up at Raw doesn't mean Flair has to book him, or even let him in the building, but he could always do a run-in. Maybe Vince will send him over to get the Hardcore title back from Raven.
I saw the show, and I can't say that I've seen it before. Is THE old show you mention the one with Prototype? I don't remember if that was UPW, but tonight's was a different show than I've seen before. Why was Test wearing a Kane mask?