This isn't true --- the choice is between N-6 and N-5 people; N-5 people is clearly better. Not to be too blunt, but I think you've badly misunderstood the concept of a utility function.

Yes. The hypothetical utility function could e.g. take a list of items and then return the utility. It need not satisfy f(A,B)=f(A)+f(B) where "," is list concatenation. For example, this would apply to the worth of books, where a library is more worthy than however many copies of some one book. To simply sum values of books considered independently is ridiculous, it's like valuing books by weight. Information content of the brain or what ever else it is that you might value (process?) is a fair bit more like a book than its like the weight of the books.