Yes, it is Tcase, and your 98C is Tjmax, which may wear out the CPU faster.
That's true, but 75C won't hurt anything. Honestly, anything less than 80C is basically ok for longevity (although I'll admit that I haven't let my 2500K get above 70 since I got my 212 Evo. I had it up to 93C with the stock cooler, though, when I was testing how far I could OC with it while I waited on the 212 Evo. Took it like a champ, though.).