I don't understand why there's confusion. It's not a sail on the thing, it's a turbine. Isn't this just gear ratios? The car goes as fast as whatever power the turbine makes can be delivered through a set a gears (or chains/sprockets...same thing).
1) Nah. Nah. [Two boats in a cylinder] Well, that looks right, but I'm not 100% convinced.
2) Unconvinced. Looks possible. What about a similar experiment with wheels? [1] [Similar experiment with wheels] Totally convinced! Also, nice toy model for the treadmill.
[1] I actually didn't imagine all the details about the experiment with wheels. But that exactly what I wish I had imagined if I had more time to think about it.