I seem to remember reading somewhere that Superman's costume was made from the blankets he was wrapped in in the space capsule that took him from Krypton to Earth - his stepmother unraveled them and wove his costume from the thread. Since the blankets are from Krypton, they become "super" on Earth. (Why they don't become Kryptonite is beyond my pay grade.)
You remember correctly. Pre-1985, that's why his costume was indestructible. In fact, others could wear it and benefit from its bullet-proof properties. Post-1985, Superman projects a skin-tight forcefield. This field gives him his strength, protects him from harm, and allows him to fly. It also prevents his skin-tight costume from ripping. His cape, however, is not indestructible. MD