I guess I am asking the right questions (to some degree.)
Here is an excerpt from Yihui Xie's R Markdown text:
"Under the hood, RStudio calls the function rmarkdown::render() to render the document in a new R
session. Please note the emphasis here, which often confuses R Markdown users. Rendering an Rmd document in a new R session means that none of the objects in your current R session (e.g., those you created in your R console) are available to that session.."
So that answers the first question above.