At short distances from the solar farm, yes. But it's not 100% in every direction for arbitrarily long distance. At some point, you assume the energy will be tend to be used sort of near where it's generated.

To put it another way, if you build solar between city A and city B, would you build it so it can still be fully utilized even if city A stops using any power and city B wants all of it? No, you assume city A is always going to need some power.

That's not necessarily optimal. For home installs, you can overbuild panels because they're cheap compared to the inverter. Then you curtail sometimes at midday and have extra energy on cloudy days and in the morning/afternoon. Turns out that's more cost effective than sizing the panels perfectly. The same logic could apply to utility farms, because transmission lines can be expensive. I don't really know myself since I don't work in the industry, but I would not be surprised if they slightly overbuild vs. the transmission line capacity.

If by output you mean the maximum output of the inverters. The maximum output of the PV modules can be higher, particularly if the field has integrated batteries.

By this definition all reserve capacity is wasted money. That is clearly false, as demonstrated by the event in this article _not_ leading to failure and harm.

I agree with your use of the word "should" here. But that unfortunately is not what happens in reality.