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The factor of safety is material strength divided by working stress, so 250 MPa yield against 100 MPa working gives 2.5. It absorbs uncertainty in loads, material variation and analysis error rather than representing spare capacity to be used. Typical values run 1.5-2 for aircraft where weight is critical and 4-8 for lifting gear.
Factor of safety
FoS = material strength / working stress
Margin of safety
margin = (FoS - 1) x 100%
Yield for ductile materials in service, since permanent deformation is already failure. Ultimate is used for brittle materials and for collapse checks.
No. It costs weight, material and money, and an over-heavy part can push loads elsewhere. Codes specify the appropriate value.