No, buying a larger power supply will not hurt at all. It will still only pull the power from the wall that the computer needs. I always buy a larger power supply that what I actually need. It keeps the power supply from straining and heating up more. Power supplies ar more efficient at around 60-70% of their max. Be sure to get a very good quality power supply. The cheaper ones have all kinds of problems and usually don't have the safety features of the better quality ones.
No. Xeons are server CPUs and usually slower. They are good for servers but not so much for Desktops. Stay away from the 'higher cost means it is better'. It doesn't. Look at the functions and what it was designed for and what you will be using it for. You can spend a lot more money for a Motherboard and a CPU. But, why spend money on something that will do stuff you will never use. You can buy an i7-6950X which costs around $1700 in the US. It is a very strong CPU, but you will most likely never use 50% of what it will do. The CPU I suggested will do anything you will ever want to do, and will do anything the 6950X will do. Will the 6950X help you in gaming? No. Is it faster? no, it's slower. Will it encode videos faster? Yes. The only reason to get the 6950X is if you were going to encode videos all day long every day, or use 3D Modeling software all day every day. If you are not going to do that, you are wasting your money.Oh so Xeon series are better than i7? More functions and better speed right?