1) It produces blocks every 17 seconds. It can do this without neglecting security, because orphan blocks count as uncles and are included in the security of the whole network.
2) It has a scalable/dynamic blocksize. The miners can scale the gas limit up or down by a certain amount. If the current gas limit (pi million) gets hit, miners can start increasing it.
3) Tx fees purpose is primarily for DDOS protection & solving the halting problem with turing-complete scripts. It's not a fundamental element for security, because the issuance rate is constant. This means that a "fee market" doesn't need to exist as much as in Bitcoin, in order to make sure the blockchain remains alive. It has an infinite, but predictable supply, rather than finite.
4) Future scalability improvements include Casper PoS, which will decrease block time to around 1 - 4 seconds & sharding, which will remove the need for every node to process every part of the transaction space.
These additions will mean that for the current period, transactions will increase, and perhaps lead to more centralization as not many will run nodes to keep the whole state. This is a trade-off in return for running more transactions.