He's playing - and not very good. The phrasing is messed up, making stupid mistakes on easy lines, vocals are meh. Honestly, I could go to any blues open-mic jam and find someone on that level... He's hired a pro-band to back him up so the whole thing sounds ok, but Seagal's playing is crap.
He's guitar picking technique is very unorthodox to say the least. Maybe he's been taking lessons from someone who doesn't like to use a pick, the legendary Jeff Beck himself .
Yes I believe he is. This guy has a major huge collection of Guitars. Somewhere along the line he learned to play. Not my favorite actor, but he was at one time a serious Martial artist.