Sorry, not been on here for a while and am a bit late to the party!
1. NO there's no legal requirement for a car to have an airbag. The legal requirement is for it to pass the crash test (which you pass or fail by how badly "injured" the dummy is afterwards) and in almost all cars, that's easier to achieve with an airbag. Most cars made in the last 5-10 years will meet the bare legal minimum requirements without the airbag deployed but to get their EuroNCAP 5 star rating (which is NOT a legal requirement, by the way!) they definitely DO need their airbags!
2. YES your head and arms DO tend to hit the steering wheel, even with a correctly worn seat belt. This is especially true of modern cars where the seat belt was designed to work with an airbag. Many of them have "peak load limiters". These are features which, once the tension in the belt reaches a certain level, start to "yield". This limits the load going into your sholder and collar bone, but of course, it means you move further forward too. The airbag is intended to "share" the load of restraining you, along with the belt. Basically, they get the belt to do as much as it can without seriously injuring you, and then they try to get the airbag(s) to do the rest. If you look at the approval label on your seat belt, it will be something like "Ar4mp". There might be an "e" or a "t" in there - the "e" being an energy reducing device and the "t" being a tension reducing device.
3. You can disable airbags (it happens quite often when a disabled person is using the car). Some place sell "dummy resistors" which you plug into the airbag socket when you remove the airbag, to make the ECU think there is still an airbag attached and working. However, in my experience they're a bit hit-and-miss in the way they work. I think that's because some of the cleverer ECUs are now not only looking for the right resistance but also the right inductance!
4. I'd put up with the hearing damage rather than the life-changing injuries! Chances are, NEITHER will happen in the rest of your driving career.