why does the amount of water vapour decrease rapidly with altitude?

Answer 1

Yes it does decrease because cold air can hold less water vapour than warm air. So at altitude water vapour gets "squeezed out" and forms droplets which make clouds and fall as rain.

Answer 2

water vapor doesn't decrease, I would think that with the drop in air pressure it would evaporate even faster until it freezes... it just gets colder and eventually turns into ice crystals that's what form the very high clouds... thats why it snows on mountains the water can't evaporate...