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There are several things that could have happened. Since the soil is a bit compacted, it may be that the roots, which were use to growing in a looser medium, may have had a hard time in the more compacted medium. It cold also be that they were not able to get enough water.

This article should help: https://www.gardeningknowhow.com/edible/herbs/dill/tips-on-how-to-grow-dill-weed-plants.htm

Pinching herbs generally helps with creating fuller plants. Here is more information: https://www.gardeningknowhow.com/edible/herbs/hgen/making-herbs-bigger-through-pinching-and-harvesting.htm

It is best to cut the diseased parts off and wash what is left well. If you do that, it will be edible.

To my knowledge, seeds are the usual form of propagation for this plant; however, I suppose it never hurts to try.

Dill is a great companion for cabbage family plants, such as broccoli and brussels sprouts. Dill also complements lettuce, onions, and cucumbers.

Yes, it is very edible to those pests. Most plants that we find tasty, rabbits and deer will too.

These articles may help with deterring them though:
https://www.gardeningknowhow.com/plant-problems/pests/deer/deer-repellents.htm

https://www.gardeningknowhow.com/plant-problems/pests/how-to-keep-rabbits-out-of-gardens.htm