A regular record is pressed by a metal plate into the vinyl, making for quick mass production. Part of the cost is manufacturing the plates, so most places won't bother with really small runs. Lathes are cut by hand, one at a time, so a small batch is easier to do (and, in fact, preferable, since it takes a long time). There's a whole scene of folks cutting records; some of them experimenting with cutting records into weird surfaces, etc.

For a while I was doing cd fulfillment through cd baby, putting it in amazon, etc. They sold out and are asking me for more, but they want 2 more. It was just me being lazy about fulfillment, but doing the records hasn't been too bad so far, so I might move my cds to bandcamp.

I'd take a poorly labeled cd-r in a plastic bag over cassettes. i don't know why they've made a comeback in certain circles, and will laugh when they are on the way back out!