Some fish are simply born with curved spines. I'd be willing to bet that inbreeding increases the number of curved-spine fry, especially if done over many generations. It's hard to say how common it is. Most better fish stores won't sell fish with curved spines, so you don't see them in display tanks but that doesn't tell you how many were culled. Also, breeders try to cull the deformed fish before they make it to retailers. I've bred fish at home before, but all of them were from different lines so I've never had inbred fish and thus never had any with bent spines. I do breed feeder guppies for my fish to eat, and in the initial batch I got several with bent spines that went straight into my Jack Dempsey's stomach instead of into the breeding tank.
About sponge filters: basically, these are a tube with a base and slots along it with a sponge around it. Some require an airstone for operation, while others only require that you hook the airline tubing up to it. Basically, air is pumped to the bottom of the tube then rises up out of the tube. This creates a current of water up the tube, so water must be sucked in through the sponge material to replace it. As a result, the sponge becomes home to a large number of bacteria that convert your fish's waste into less harmful chemicals. Sponge filters can be more gentle than power filters but don't do as good a job at remove waste debris from the water. Also, if you have a really powerful air pump running the filter, they can create a lot of surface movement which might bug your betta. I think a better option is a power filter with an adjustable flow rate.