> Does internship to employment transformation imply easier interview process overall? i.e. rather than apply to full-time position directly.

Not necessarily easier, but having 12 weeks of experience working with me gives the company much more context on my software engineering skills than 4 hours of interviews does.

> Another concern - does this also imply the offer with a below average compensation?

I don't think so. Anecdotally, I've heard that recruiters have pretty fixed packages for newgrads and that I was given a newgrad package.