1.

During the drive, the blade should be accelerated through the water and maximum power achieved by trunk rotation (body twist) as well as driving with the legs and pulling with the arm.

In this illustration, you can actually see the shaft of the paddle bending under the stress running through it.

2.

Note however that the top arm and shoulder are still relaxed, enabling the paddle to be held in a near vertical position for as long as possible. 

This means that the blade will develop a force vector (red arrow) in a direction that enables the most forward gain (i.e force straight back so the ski will travel straight forward)