How is a sarcophagus decorated and why is it decorated that way?

Answer 1

Well, some (if it could be afforded, it was expensive) had their own Book of the Dead drawn up for them. This was fashioned on their sarcophagus or in their tomb, or the scroll was placed in the sarcophagus with them.
Some had spells and incantations written (or etched) on them that had numerous purposes. Some to protect them during death(on the other side), or to protect their tomb from robbers and thieves, or to keep their place in the afterlife guaranteed, or to show others how important they were during life, or to praise the Gods, or to keep evil spirits at bay, etc...
Some had drawings of things that they wanted to keep with them in the afterlife. Others had their belongings in the tomb for same reasons. The afterlife was almost as important (or in some cases more so) as this life.