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He burnt down the house and flooded the school because the manipulated dead (Frank) told him to. He claims he agreed because Frank saved his life and he "has to obey him". This allows the tangent universe to further repair itself in that further events can occur. As Donnie points out himself, if the school wasnt flooded he would never have had that conversation with Gretchin for example.

Not the artifact but the REPLACEMENT for the artifact came off his mother's plane. It is pressumed that he removed it via telekenisis and placed it into the wormhole he created. Philosophy of time travel said that he must return the artifact. This is how he does it.

She doesnt get home fast. We have now left the Tangent Universe and returned to the standard universe. Time/space has healed itself.

Yeah he was high ;)

I did take Donnie's death differently though. I though that he saw the pain and death that he could cause via the tangent universe and made the choice not to put everyone through that. Note that he remembers Gretchin's speech about taking back all the time and filling it with something better. Only then does he get in the car and drive home to die. I guess this is also the reason for him saying that there will be so much to look forward to when the word ends.

But this is just an interpretation of course.