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1) Yes, there are quite a few but they're pretty easy to find. They do provide some nice background and more immersion though. 2) There are weapon upgrades but you can't buy combos. Combos are very basic and limited in this game but TBH I don't think it needs a deep combat system, IMO it remains fun without it.
~~~~~~~~~~~~ * Snicker-Snack * ~~~~~~~~~~~~ ~~ See quote for Ninja Gaiden 2 survival scores ~~