1 Will this not make its network slow?

If the blockchain gets so large that only one or two nodes exist than yes. However, I find this very unlikely to happen since hard drive compacity gets cheaper with each passing year.

2 Can this be mined by a CPU?

Yes and is much more effective than mining with a CPU on Bitcoin. It won't make you rich but you can at least still get rewards with pool mining. It is better to GPU mine though.