Very good questions. Thank you for you interest in the growth and development of Hinduism, which is a complex tradition, difficult to generalize. I will try to be brief in my answer and cover the important points. Hinduism has many sects such as Vedism or Brahmanism, Saivism, Vaishnavism, Tantrism, Smartaism and so on. In addition to these there are several teacher traditions, folk traditions and tribal traditions, whose influence are seen across the breadth of Hindu society. Then, encompassing all these is popular Hinduism or mainstream Hinduism, which is some kind of a hotchpotch, which is practiced by a vast majority of Hindus, who do not follow any particular sect or tradition but worship numerous popular gods and celebrate all festival of Hinduism in a traditional or non-traditional manner. Of these numerous sects, caste is an important issue in Brahmanism, Vaishnavism and Smartaism where the Brahmana caste dominates noticeably.
In the early phases of development of Hinduism, higher castes had access to the Vedas and the lower castes were denied even an opportunity to hear them. The Brahmanas maintained a strong hold on the ritual part and the Kshatriyas maintained some hold on the knowledge of the Upanishads. The Brahmanas worshipped fire and the Sun. The Kshatriyas worshipped Prajapati, Indra, Varuna, Mitra, who were reckoned Kshatriya gods. The knowledge of the Self originated in the Kshatriya circles and was occasionally taught to Brahmana students upon request. Then the Kshatriya clans disappeared gradually and the entire body of the Vedic knowledge became the sole property of the Brahmanas. They made sure that the knowledge stayed with them.
They imposed caste restrictions upon the teaching of the Vedas mainly for two reasons: to prevent the corruption of the Vedas and to protect the ownership rights, upon which their livelihood depended. It is similar to the manner in which the phone companies and IT companies today keep fighting to protect their trademarks and inventions. Since there was no legal system to protect intellectual property rights in those times, they invoked fear and divine authority to keep people from acquiring the knowledge.
Finally, the word Sudra is a very lose term. Whoever could not be classified as a Brahmana or a Kshatriya by profession and whose profession was not trade or commerce was put into this category. The result over 90% of the people in the subcontinent were Sudras, including several kings, high ranking officials, feudal lords, people who did not acknowledge the Vedas, atheists, foreign immigrants and so on. Then there were hundreds of tribes, village communities and local republics, who never submitted to the Brahmana's superiority. All these were also lumped together in this category. The classification of the Sudras was therefore a Vedic expediency, to distinguish the owners of a specific body of knowledge from the rest. The Brahmanas thrived if the local people and the kings respected their knowledge and authority. If not, they migrated to another place.
Now this 90% population practiced their faith in numerous ways. They followed folk or rural traditions, which involved worship of ancestors, trees, animals, serpents and village deities, even Vedic gods such as Vishnu, Siva, Kartikeya, Ganesa, Hanuman, saints and seers and so on. In course of time, these traditions morphed into what we call today popular Hinduism. This is also why today we do not have the traditional caste system of consisting of four principal castes. There are thousands of castes and their origin and true classification are difficult to determine.