A. The first thing to realize is that all 127.0.0.0/8 addresses are local by definition. Traffic sent to these addresses can never go out onto the network, whether LAN or WAN.
Over at linuxquestions.org, catkin had this to say:
127.x.x.x addresses are all local. Rarely is there any need to use more than one and 127.0.0.1 is conventional. Netsearching showed others used/created: 1. By Yast. 2. For starting MySQL when no DNS system available 3. a loopback device for a second NIC 4. When using two DNS services on one system 5. To give multiple names to the local system (not clear why they are not all given 127.0.0.1 -- maybe it's a Novell/SUSE thing) 6. To resolve DHCP initialisation problems (?)
So, it appears a second local address definition in
/etc/hostscould be useful for several reasons.