I have often wondered why upgrading your undead minions hurts you at all, I suppose it is a balance issue? Regardless nothing in the text it gives leads me to believe it would hurt you.
If anything, it would be exposure to negative energy that hurts and would thus be better represented by negative energy damage.
This would also allow one to protect themselves from the backlash of improving their undead while still having the damage with unprotected use.
I believe the idea is that you're giving a portion of your own lifeforce to strengthen your creation, so as a result it drains you.
Yes, and it's a very important balancing factor.