1. Churn is bad, but it's a red flag that goes away. I think how you deal with bad hires matters more. Pushing the burden to the rest of the team (i.e. not firing) or bullying them into quitting is what hurts teams more. There's also a morale hit to having someone do the job of two people while waiting 4 months to hire someone else for the role.

2. For the most part, you just need someone who can do the job. Most people applying for seniors could; it's just a question of how fast/accurate/stable. For the most part, expected salaries tends to correlate with their ability.

Many of the bad hires I've seen were "cheap hires"; they applied for senior positions but were often paid half as much as a senior just because they were from a poorer country.

One guy had more ability as a researcher, less as a developer (he'd get things done very, very slowly, but produced well crafted code and was able to tackle the hardest problems). One guy was a great programmer but had personality issues, often getting into fights. Another scored highest on all the tests, but worked 12 hours/day and got nothing done. So I'm not sure assessments help in filtering most of these problems.