1. I think it is a sign that his wife does not do it for him. He actually seems to have quite a collection down in the basement, so he has been making these clandestine visits for a while.
2. The video he watches suggests he is sexually attracted to schoolgirls. Probably he is attracted to some of his female pupils but represses it because of the risk of being fired or even jail (he of course knows what happened to Novotny) and this is where he expresses it. I think he loathes Tracy and is attracted to her at the same time - a major motivation of his in the film.
3. The video he watches shows a football jock with a cheerleader, and it causes him to think of Paul Metzler, also a football jock, who he then persuades to run against Tracy. So the video advances the plot.
"Chicken soup - with a *beep* straw."
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