1. I think the Duke Leto knows it's a trap, but maybe the spices of the planet and what they could possibly gain from it, even the aid of the Fremen against the Harkonnens is good enough reason to go there.
2- CHOAM is a representation of the American government maybe?
He knows the Harkonnen aren't strong enough to act alone and not well liked enough to form an alliance with any other great houses.
He doesn't really see the Emperor as a threat--he sees no motive for the Emperor overtly acting against him--as long as he gets his spice, he should be happy.
Also, he sees it as a point of honor. His own people look back to his father with nostalgia--he needs to remove himself from his father's shadow. Taking Arrakis is a way to forge his own identity--and to improve the position of his house.
He does a lot of things because of the image it shows. He lives in an ancient castle because of the image. He doesn't marry his lover because it presents an image of him being open to an alliance through marriage. He takes Arrakis because it presents an image of prestige and power.
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