1) Since this era was termed the gilded age, meaning that from the outside everything looked fine but in the inside of America that was not the case. I think a lot of the tension was a accumulation of several problems, From the social social tensions of the immigrants of Germany and other counties looking for work in the industrial America to finding ways to make a living. In the case of the chapter, the main character is going through troubles with his work and the divorce of his wife.
2) I think that he included the fair as a historic setting for the plot and to use it to cover Holmes’ serial killer motives. I’m not too sure honestly. Also i guess that they used this as a connection to the gilded age, with most people seemly interested in the fair, while others have problems to deal with that the people who are interested in the fair have no idea what’s happening.