1) If Jesus Christ did exist, he would have been of Middle Eastern ethnicity. Why is the commonly accepted image of Jesus a Caucasian male?
What's your definition of Caucasian, pale skin, fair hair and blue eyes? Middle-Easterners often possess Caucasoid features, such as shape of face/nose/..., which would render Jesus a Caucasian male, in theory.
Your question is basically: "why is Jesus often depicted as a pale-skinned, fair-haired male while he probably would've had a far browner skin-tone?"
It's already been said in this thread: it's easier to worship a figure if he/she meets your culture's beauty standards. Ethiopian pictures of Jesus depict him with Ethiopian features, so it aren't exclusively Europeans who do that.
2) From what I understand of the Bible, it never says that "church" is a place of worship or a designated building. Why is it that religions of today build massive, expensive buildings for worship? My understanding of "church" is that it is the act of worshiping your god, by yourself or as a group. It never says in the bible that you have to go down the street to an ornate building for church. Furthermore, the bible preaches against vanity. Isn't it vain to spend tons of money to make your church ornate and beautiful?
I'm curious because I saw a story recently about a church that is going to cost 130 million dollars. Couldn't that money be put to a better use than a gigantic cross?
Just like with other great structures which only appear useless (they often indirectly generate income from tourism, which is always a good thing to have), they are created to show off one's power and wealth. If it concerns buildings of worship, the builders often do so with a good intention as well. It's not just showing off power, but they also see it as an act of benevolence, rather than vanity. The leader builds a church for his people because he wants to provide a place of worship for the people who practice the same religion as he does. There are two ways to improve spirituality: through simplicity, which is easier because you only have to build a low-tier building for your followers; or through splendour, beauty, 'greatness', which ofcourse requires more complex and more expensive buildings. Most leaders who are inspired by benevolence want the best for their people and thus go for the latter option.