The quoted $18 price plays no role in the story; the point is that it was bought on credit, with the people taking the credit being insolvent, and that there was a systemic bias towards issuing them credit anyways.
The market for beer bonds doesn't exist if there isn't an ever increasing ceiling on the price of the asset that bond is backing. In this story beer went to $18 and everyone was willing to pay it, not because it was worth $18 but because no one was having to actually SPEND anything (yet) for it (except those buying the bonds).
It may not have been the most important thing, but you need the "bubble" in the story for the bubble to "pop":)
That's not correct. The market expands as new bonds are issued. The key factor is that further credit is given, regardless of the size of each individual loan.