Here's a circuit
The 0.15ohm ressitor needs to be 100x of its current value.
You can buffer that pnp with a power npn / n-ch mosfet so you can use a smaller pnp device instead.
No it doesn't. It's chosen so that when the load is around 10 amps, the load that the 78xx sees is 1 amp. The idea is to carry over the current limit and thermal protection built into the 78xx without needing extra components.
I've been using this circuit for literally decades... believe me, it works.