since 1.8, notch has implemented a new terrain generator that simplifies world generation. the world is infinite and dependent on your cpu's capacity to store info & how much of that is deticated to minecraft. essentially, until mc runs out of space, the world is infinite. so are your creations. the sky is the limit my friend.
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They randomly generate throughout the world, to find one just keep digging underground.
You have to spawn it in, or re-generate your nether if you have a pre-1.5 map
A Minecraft world seed is what Minecraft uses to generate the terrain to begin with, it does not create any user-created structures like castles, only things like NPC villages, mines and strongholds.
The seeds in minecraft only generate a world's landscape. Whatever you build in that seed is not part of the seed, it's part of your save. You can download other people's worlds though if they have a link
The Minecraft Launcher is 263 KB while the Minecraft folder is approximately 46 MB.