For Switch 1 games, docked means "we're running as fast as the internal cooling can handle and outputting 1080p, assume the user can't use the touch screen and such". A dongle is fine here as long as you don't block the air inlets or exhausts, or place the Switch on something heat sensitive.
For Switch 2 games, docked means "we're running as fast as the externally boosted cooling can handle and cranking out 4k, and assume you can't use the touch screen and such". Assuming the fan does useful work here, then with a dongle you'll be thermal throttling and have a bad gaming experience - on a PC you'd turn down the settings, here those are hardcoded.
So, what about using the switch 2 handheld mode on a switch 1 dock, seeing it's the same resolution? Well, if you tell it to run in handheld mode it might assume you have access to the touchscreen, always-on VRR and HDR, is using internal speakers, etc.
It's totally doable, but to do this right the stack needs to be prepared for it. As such, I understand why they did it.
Heck, this was the same issue for the Switch 1, and it took a while for third-party docks to pop up. It'll take all but a moment for third party docks to support this.
Still, what happens if you connect a Switch 2 to a 1080p display? I assume it would render at 1080p, because rendering at 4K and downscaling for output would be too wasteful. Switch 1 even has a setting for that, allowing you to choose between 480p, 720p, and 1080p.
Note that the cooling fan inside the dock is for cooling the dock and not the Switch 2 itself. The Switch 2 has its own fan for that.
So while not everyone docks the Switch 2 to a 4K display, the Switch 2 dock must support that.
It can be, but it doesn't have to be. DisplayPort is mostly a superset of HDMI, with different voltage levels. Going from HDMI to DisplayPort is much harder than going from DisplayPort to HDMI, though the hardware to do this is apparently much cheaper than it used to be, which is nice to see.
DisplayPort to HDMI only requires level shifting, as I understand it. I'm sure someone will correct me if they see this and I'm wrong.
But also yes, most display port implementations also speak hdmi and can get away with simple converters
You might be thinking of DisplayPort++, which is a special port supporting both DisplayPort and HDMI, allowing passive adapters. This is not available in the USB-C DisplayPort AltMode.
Because the Switch 2 is a different machine. Games being backwards compatible (via emulation) doesn't mean the hardware is (or has to be) backwards compatible. Different display chips, different display protocols, etc.
People made all kinds of claims about how the Switch 1 wasn't USB Type-C compliant when it was discovered that the Nyko dock kept frying the power management IC in the first Switch console. I think a lot of that false communal knowledge has carried forth to the Switch 2, unfortunately.