Some mission rewards. But mostly from leveling rewards. You'll get around 15 BOFFs as leveling rewards as your level up to max level. You'll get a completed mission to respong to the Personnel Officer. You'll choose between 3 different BOFFS. And they in quality as you rank up. They will be Purple BOFF when you reach Admiral.
No. It simply means as you level Starfleet gives you better quality BOFF personnel choices to use - assuming you want to use them.
I often replace a White with a Purple of the same species and sex. I simply make him look like the original and give him the same name as the original - right after I delete the original.
There's an easier way to do that. While at a tailor you can save your Boff, get one of the same species and gender, go back to the tailor, click load saved costumes and presto! You have your Boff back!